EZION REVERSE TENDER FOR EZION SGD 5.25% 05/2015 NOTES
Ezion Holdings Limited (the “Company”) has mandated DBS Bank Ltd. as sole bookrunner and dealer manager for a proposed (i) SGD denominated offering out of the Company’s SGD 1.5 billion Multicurrency Debt Issuance Programme (“New Issue”) and (ii) liability management exercise. The use of proceeds of the New Issue will be to fund the proposed tender/repurchase of its existing SGD 100 million notes due in May 2015 (ISIN: SG6V18981831) (the “Existing 2015 Notes”) and for general corporate purposes. The proposed tender/repurchase of the Existing 2015 Notes will be coupled with a consent solicitation exercise to amend the terms to allow for early retirement of the Existing 2015 Notes (the “Invitation”). Provided below is a summary of the indicative terms of the proposed Invitation:
Conditional Invitation to Offer to Sell:
Tender Amount: Up to S$100m (size conditional on the ability of the Company to obtain financing)
Early Bird Tender Price on Existing 2015 Notes: 103.250% of the principal amount of Existing 2015 Notes
Standard Tender Price on Existing 2015 Notes: 102.650% of the principal amount of Existing 2015 Notes
Conditional Consent Solicitation:
Consent Requested on Existing 2015 Notes: To insert an issuer call option @ par on June 2014 and any date thereafter
Early Bird Consent Fee on Existing 2015 Notes: S$625 per S$250,000.00
Standard Consent Fee on Existing 2015 Notes: S$250 per S$250,000.00
Payment of any Consent Fee will be conditional on the amendment of the terms.
The details of the proposed Invitation are subject to market conditions and will be provided to the existing holders in the near future. The proposed New Issue and the Invitation is expected to be launched in the near future subject to market conditions.
On 8 May, Ezion tripled their MTN programme size from SGD 500 mio to SGD 1.5 bio after reporting a 62% in Q1 2014 profits.
We can be sure of more bonds to come.
At 103.25, the yield on the Ezion 5.25% 05/2015 would be 1.98%. That is a windfall for bond holders compared to the current market price of 102.20/102.60 for the bond which makes it a compelling sell assuming that they are paying you the coupon that is due to you. (I am assuming the 103.25 is the clean price as is in practice)