New Issues Review : Noble USD Perp and Koh Brothers SGD
NEW ISSUE: NOBLE US$ REGS PerpNC5 | IPG: 6.000% AREA
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
ISSUER: Noble Group Limited
ISSUER RATINGS: Baa3 (positive)/BBB- (stable)/BBB- (stable)(Moody’s/S&P/Fitch)
EXPECTED ISSUE RATINGS: Unrated
EXPECTED EQUITY CREDIT: 50% Moody’s / 50% S&P (for first 5 years) / 50% Fitch / 100% IFRS
SECURITY DESCRIPTION: Subordinated Perpetual Capital Securities
STATUS OF THE SECURITIES: Subordinated, senior only to ordinary shares
FORMAT: Reg S, Registered
ISSUE SIZE: US$ Benchmark size
MATURITY: Perpetual non-call 5 Year
INITIAL PRICE GUIDANCE: 6.000% area
DISTRIBUTION RATE: From Issue Date to Year 5, at the Initial Distribution Rate
From Year 5 to Year 10, reset 5YR UST + Initial Spread over UST
From Year 10 to Year 25, reset every 5 years at 5YR UST + Initial Spread over UST + 25bps
From Year 25, reset every 5 years at 5YR UST + Initial Spread over UST + 25bps + 75bps
OPTIONAL DEFERRAL: Cumulative and compounding
DIVIDEND STOPPER: Dividend stopper on Junior and/or Parity Securities if Distributions are deferred
CALL OPTION: Callable at Par at the end of Year 5 and every Distribution Payment Date thereafter
EARLY REDEMPTION EVENTS: Withholding Tax Event (Par), Equity Credit Classification Event (101% to Year 5; par thereafter), Minimal Outstanding Amount Event (Par), Accounting Event (101% to Year 5; par thereafter)
USE OF PROCEEDS: Refinancing of 8.5% Perpetual Capital Securities issued on Nov 1 2010 and general corporate purposes
TERMS: SGX Listing, 200k/1k denoms, English Law (subordination provisions governed by Bermudan law)
** PRICE GUIDANCE 6% AREA
** EXP DEAL SIZE: US$ REGS BENCHMARK
** TIMING: AS EARLY AS TODAY’S BUSINESS
NOBLSP 3 5/8 03/20/18 400MM 102.500 2.916% T+122 G+169
PTTEPT 3.707 09/16/18 500MM 103.832 2.743% T+105 G+132
PTTEPT 4 7/8 1MMM 100.625 4.733% T+304 G+303
CHINLP 4 3/4 03/19/20 500MM 108.115 3.193% T+150 G+130
CHINLP 4 1/4 750MM 101.125 4.015% T+232 G+221
I really would not expect anyone who had their Noble USD 8.5% perp called so unceremoniously,to be buying into this issue or anyone who had liked the Far East Horizon SENIOR perp yesterday to be interested in this one.
Yet, strange things do happen.
CIC is behind them for 13.92% and it gives Noble some clout much like Olam with Temasek’s 58.44%.
Far East Horizon only has GIC’s measly 5.96% stake.
An interesting observation in an article out of Reuters over a year ago is that Asian retail investors prefer unrated perpetuals that do not abide by rating agencies’ regulations for lower step ups of less than 1%.
For that reason, retail investors should not find the call option terms too enticing.
NEW ISSUE: KOH BROTHERS 3.5YR SGD
NEW ISSUE ANNOUNCED FOLLOWING GOOD INTEREST FROM ROADSHOW
PRICE GUIDANCE: 5% AREA
EXPECTED SIZE: BENCHMARK
Familiar SME name. SGD 136 mio market cap and so a benchmark issue which is 200 mio would be good work and a great accomplishment for the company. Besides they are already running on 3 times financial leverage which is alot (assets of about 700 mio/equity 228 mio). Throw in another 200 mio, and what is the difference ? Oxley still looks worse at 11 times and much more like a bank, if you ask me.
3.5 year interest rate is about 1.2% which gives this bond a 3.8% premium.
But with a 40 year track record in Singapore, anyone who buys this bond will be a sure fan of the company and there is no need to delve too much into analysis.
Even KSH Holdings with 2 years left issued last year at 5.25% for 2.5 years, is trading at 101.90 4.2%.