SGD New Issue Review : TA CORPORATION SGD 2.5-YR SENIOR UNSECURED
TA CORPORATION SGD 2.5-YR SENIOR UNSECURED – PX GUIDANCE
Issuer : TA Corporation Ltd.
Status: Senior, unsecured
Rating: Unrated
Issue Size: TBD
Distribution: As per Information Memorandum, primarily Singapore selling restrictions Under Section 274/275 of SFA
Format/Docs: Reg S Bearer / Issuer’s SGD 150 million Multicurrency Medium Term Note Programme
Price Guidance: 5.5% area, semi-annual, ACT/365 (Fixed)
Tenor: 2.5-Year
Denomination: SGD250K
Governing Law: Singapore Law
Listing: SGX-ST
Clearing: CDP
Selling Restrictions: Sections 274 and/or 275 of the Singapore SFA
How cute and IT IS LISTED BTW, although no one could find it all morning.
Market Cap SGD 158 mio.
Brief description : TA Corporation Ltd. develop and sells residential and other types of properties. The Company is also involved in the construction business, including complementary services such as steel fabrication and metal works, a worker training and test center in Chennai, India, as well as the design, installation and maintenance of air conditioning and mechanical ventilation systems.
Was going to label them the smallest market cap for an issuer til I found the list of high risk bonds last year led by Enviro-Hub holdings (SGD 58 mio mkt cap), Marco Polo Marine (SGD 129 mio), Heeton and Mencast, both at SGD 170-ish mio.
This proves it. Everyone is borrowing as much as they can right now.
Firstly, I think we are all unclear as to what their actual business model is. Is it construction or training or air con ?
Secondly, they are quite highly leveraged already at 2.9 times.
Thirdly, I wonder what made them price this under Gallant ?
Then I found out the reason !
TA stands for Tiong Aik, which has been around for 40 years and we will surely see lots of tow kay support for their fellow bonds.
ARRGH.. what’s with the influx of rubbish bonds! By that i mean worse than JUNK!
Apparently, a household name originating from Malaysia akin to the likes of our Lian Beng type. They have to issue otherwise no face amongst the SME towkays.
It looks like their claim to fame is that they have been around for 40 years. Incredible how anyone would buy this given their leverage and market cap.
Why would banks even promote this to their customers. Wealth managers not having their interests aligned with us customers is a sad state of affairs.
I think it’s necessary for every respectable towkay to have a bond issue up their sleeve so that their golf games will be more exciting.
One banker tries to unload Swiber 2016 to me. I told him I don’tlike their leverage, he said, it is only 2 years! I can only conclude this is a sales person.
Ask him to show you the cashflow projections for 2 years.
They need to move these bonds because if they don’t then will have to write down and I think its pretty easy to write down Swiber. Once they write down, everyone suffers because of the new market price which, of course, there are many ways to circumvent. So beg or blackmail some one to buy, the other option is fraud.
Thanks TH.
I wouldn’t be this ‘wise’ had I not chanced upon your blog and educated by you and many participants here. Really grateful.
Koh Wee Meng is a big shareholder in TA right, I think. He’s probably taught his buddies a few of his tricks 🙂
I could not find this company listed in Sgx,my relationship manager was surprisingly no wiser.Glad I rejected it straight away.
ShadowChaser, the ticker is PA3.SI. They are actually a profitable little coy ($30M last year). I am not comfortable with their rev and leverage. But it was a few times over subscribed. Every one has their own investment philosophies!
Thank you RedBaron, there will be always other opportunities in the future.
Hi all,
Just curious if the senior ranking of this bond deserve a better rating?
Thanks in advance.
Better Rating ? Its un-rated!
Many a times I am not sure why some investors are fussing unrated bonds and crying out over its financials etc. While it might be true that unrated bonds carry a higher risk, unrated does not equate junk. And I am not referencing to TA corp but rather, in general.
True. Ratings do not matter these days for capital weightage. It is in the inhouse credit matrix of the banks that matters which is why I suppose we are seeing such high leverage awarded for names like Gallent Ventures.
For the first time investor, there is also the concept of someone perpetual is better than your senior which they need to get around.