SGD New Issue Review : Golden Agri 3Y over 4%

NEW ISSUE : GOLDEN ASSETS INTERNATIONAL INVESTMENTS PTE. LTD. SGD 3 YR SENIOR – PRICE GUIDANCE

ISSUER : Golden Assets International Investment Pte. Ltd.
GUARANTOR : Golden Agri-Resources Ltd
STATUS : Direct, unconditional, unsubordinated and unsecured Notes
ISSUE SIZE : TBD
DISTRIBUTION : As per Information Memorandum dated 4 April 2014 including the Singapore selling restrictions under Sections 274/275 of the Singapore Securities and Futures Act
FORMAT/DOCS : Bearer / Issuer’s SGD 1.5 billion Multicurrency Medium Term Note Programme
PRICE GUIDANCE :   Mid 4% area
TENOR :  3-Year
INTEREST PAYMENT : Semi-annual, actual/365 (fixed)
ISSUE DATE :   [●]
SETTLEMENT DATE :   TBD
MATURITY DATE :  [●]
DENOMINATION :   SGD250K
GOVERNING LAW :   Singapore Law
LISTING : SGX-ST
CLEARING: CDP
SELLING RESTRICTIONS: Sections 274 and/or 275 of the Singapore SFA
TIMING:  As early as today’s business

** NEW DEBUT S$ 3YR SENIOR ANNOUNCED
** INITIAL PRICE GUIDANCE: Mid 4% area

*** Golden Agri-Resources: SGD Comps ***
WILSP 3.50% 01/25/2017 bid at 3.23% / Z+231 (100.7)
WILSP 4.10% 01/25/2019 bid at 3.93% / Z+227 (100.7)

STI Index stock. Market cap 7.77 bio.

3 year interest rates at 1.03%. Thus 4.5% is a 3.4% premium.

Hearing that the issue size will be SGD 100 mio out of their SGD 1.5 bio MTN programme.

They have SGD 1.57 bio worth of debt (including those of subsidiaries) outstanding in various currencies – MYR, USD, IDR.

Here is a list of the issues under Golden Agri.

Issuer Name	Coupon	Maturity	Amt Issued(MM)	Curr	Bid Price	Ask Px	YIELD
Golden Assets International Finance Ltd	4.75	Aug-18	500000000	MYR	99.48	99.48	4.89%
Golden Assets International Finance Ltd	4.08	Mar-16	250000000	MYR
Golden Assets International Finance Ltd	4.35	Nov-17	1500000000	MYR	98.35	98.35	4.87%
Golden Agri-Resources Ltd	2.5	Oct-17	400000000	USD	98.288	99.2	CONVERTIBLE

Golden Assets International Finance is rated Aa2 by RAMS (Rating Agency Malaysia Berhad) and Golden Agri-Resources Ltd is rated Ba2 by Moody’s.

I think they mean business with their accounts looking neat and leverage ratios way healthier than Wilmar and Olam, although I have not checked up on the “living assets”, like in Olam’s case (that got them into trouble).

This is a good start and a sound coupon, in my opinion. Comparing against Olam’s 5.75% 09/2017 which is going at USD 4.7%, they are almost on par in terms of credit premium (at 103. 23 cash price, Olam is paying 3.5% over the prevailing 3.5 year interest rate).

I would expect a good take up of this bond at the coupon level and hope they will keep the haze away this year.

http://www.eco-business.com/news/golden-agri-april-under-fresh-scrutiny-unsustainable-practices/

What a terrible punchline it would be if the sales pitch went like….

Buy Some GGR Bonds Today and Invest In the Haze for Tomorrow !