SGD New Issue Review : Aspial 5Y low 5%


Issuer: Aspial Corporation Limited
Status: Direct, unconditional, unsubordinated and unsecured Notes
Rating: Unrated
Format: Reg S, S274 & 275 of Singapore SFA
Tenure: 5 Years
Issue Size: TBD
Payment: Semi-annual, actual/365 (fixed)
Redemption at Option of Noteholders Pursuant to Change of Shareholding Event: In accordance with the Programme
Redemption at Option of Noteholders upon Cessation or Suspension of Trading of Shares: In accordance with the Programme
Redemption for Taxation Reasons: Yes, in accordance with the Programme
Details: SGD250K/Multicurrency Debt Issuance                                             Programme/ Singapore Law/CDP Listing:   SGX-ST

– New Aspial SGD 5yrs announced at the back of reverse enquiry
– Initial price guidance at low 5s

Aspial 4.5 2017 @ 100.40, 4.33%
Banyan Tree 4.875 2019 @ 100.50, 4.76%

You know a company has made it when they can issue 5 years. Because dicey companies usually only max out at 3.

Aspial has come into the big league.

Now, can anyone tell me what does Aspial do ?

Jeweler ? Money Lender ? Or Property developer ?

Or all of the above ?

Majority owned >75% by the family, its share price has been soaring as they launh 5 new property launches.

Mkt cap SGD 820 mio and highly geared (at 4.5 times to give Swiber a good fight)  with their inventory more than doubling between 2011 and 2013 from SGD 353 to SGD 869 mio.

Healthy income stream which goes to show that it is good to dabble in different businesses that could be synergistic because you can lend money to people to buy your condos and jewellery too ? (not really sure if it works)
aspial income

Its no wonder there is no analyst coverage of them except for 1 brave soul in New York who recommends a SELL and UNDERWEIGHT based on their economic value add. Incidentally, out of the handful of Singapore companies they cover, Swiber stands out as a sell too.

I will not say too much about Aspial. Money lenders intimidate me. I know a chap who owns a proper money lending outfit (take home about 25% returns p.a. nett) and I do not really want to mess with him.

Just some things to note.

1. Aspial had a consent solicitation exercise after coming in breach of the financial convenants of their old notes in June last year.
2. They then established a new SGD 500 mio programme with DBS.
3. The old noteholders accepted higher coupons in exchange for the removal of the covenants.

In Jan this year, Aspial paid 4.5% for a 3 year paper and Maxicash embarked on a Variable Rate Note programme paying 1.7% for 3 month money.

In June, they are paying low 5% for 5 year money and latest dividend is at 4.26% which is mighty decent.

Might as well go for the stock, given that family businesses will not short change themselves.

Good luck folks.