New Issue Review : Ezion SGD 7YNC3 5%

**Ezion SGD 7NC4

– New Ezion 7NC4 announced
– Initial price guidance @ 5% area
– Step-up of 2% if not called on the first call date (4yrs later)
– UOP: to fund the proposed tender/repurchase of existing notes due in May 2015 (ISIN: SG6V18981831) and for general corporate purposes

Comps:
Ezion 4.6 2018 @ 101, 4.34% (remaining tenor: 4yrs 3 mths)
Ezion 5.1 2020 @ 101, 4.90% (remaining tenor: 5yrs 10mths)

Read : EZION REVERSE TENDER FOR EZION SGD 5.25% 05/2015 NOTES

Ezion is buying back the Ezion 5.25% 05/2015 at 103.25 /1.98%.  This bond issue will not add to their total debt outstanding.

4 year interest rate is at 1.30% vs the new issue’s yield of 5% and the step up of 2% is a nice consolation.

I wouldn’t be surprised if they raised enough to buy back a couple more issues but this looks like a market tester deal.