SGD New Issue Review : Singhaiyi Group 2.5Y SGD Bond
NEW ISSUE: SINGHAIYI GROUP SGD 2.5Y
Issuer: SingHaiyi Group Ltd.
Status: Senior, unsecured
Rating: Unrated
Format: Reg S, Bearer, S274 & 275 of Singapore SFA, issued off the SGD500m Multicurrency Debt Issuance Programme
Tenor: 2.5 years
Issue Size: TBD
Issue Date: [ ] July 2014
Maturity Date: [ ] January 2017
Payment: Semi-annual, Actual/365 (fixed)
Redemption at the Option of Noteholders upon Cessation or
Suspension of Trading of the Issuer’s Shares:
At par, in accordance with the Programme
Redemption forTaxation Reasons:
Yes, in accordance with the Programme
Redemption at the Option of Noteholders Pursuant to Change of Shareholding Event:
At par, in accordance with the Programme Details:
SGD250k denoms / Singapore Law/ CDP / SGX-ST
New SingHaiyi SGD 2.5yrs announced, deal is well anchored
– Initial price guidance: Mid 5s
Comps:
TA CORP 5.25% 10/ 2016 at 100.75, 4.90%
KOH BROTHERS 4.8% 01/2018 at 100.95, 4.50%
TIONG SENG 4.75% 01/2018 at 100.350, 4.64%
Credit Highlights:
– SingHaiyi and its subsidiaries (collectively the “Group”) specialise in property development, property investment, property management and mall ownership and operations and its core businesses in property development and property investment are primarily carried out in Singapore, U.S. and Hong Kong.
– The Group has invested in three real estate projects in the U.S., namely, a shopping mall known as Tri-County Mall in Cincinnati, Ohio, a commercial condominium project known as Vietnam Town in San Jose, State of California and a development project at 5 Thomas Mellon in San Francisco, State of California. The Group’s expansion into the U.S. was aided by the experience, business contacts and expertise of the Group’s management in relation to investments in the U.S.. In particular, the Group has a right of first refusal (ROFR) in respect of any property investments encountered by its controlling shareholders’ private investment vehicle in the U.S. – American Pacific International Capital (APIC). This ROFR arrangement avoids conflict of interests via obtaining approval from non-executive and independent directors for any potential investments opportunities.
– The Group has various investments in Singapore, the U.S. and Hong Kong, which includes TripleOne Somerset in Singapore, Tri-County Mall in Ohio and 5 Thomas Mellon in San Francisco.
– The Group and its partners are currently developing four residential property projects in Singapore (Pasir Ris One, CityLife @Tampines, The CosmoLoft and Anchorvale Crescent) and one commercial property project (Vietnam Town) in U.S. These projects, inclusive of the completed Charlton Residences, had a combined gross development value of approximately S$1.4 billion as at 31 March 2014.
Mid cap name ? SGD 500 mio market cap.
But guess who is the chairman ??
…………NEIL BUSH, son and brother of 2 former US Presidents. (Note the spike in share price around Mar-April last year when he was appointed)
No analyst coverage of this company except for a small little known shop, EVA Dimensions, who called for a SELL in April this year.
Except for a gap in their accounts between 2009 and 2012, the company seems to be on an expansion path with forays into the US property market with 3 projects so far.
With a SGD 500 mio MTN programme set up, we can expect a rapid push to expand their unusual market position and profits for a largely family owned operation.
Aggressive expansions and Neil Bush’s announcement that the company is targeting a main board listing would incline me towards its equity than bonds.
Yet mid 5% coupon looks decent until you realise that the company’s pre tax income was just SGD 5.9 mio last year which means that a SGD 100 mio bond issue at 5.5% coupon would take out the entire profit.
Ratios-wise, there is nothing really much to scrutinise given they are at their infant stages of operations. And my opinion is that they are trying to push a bond through at a coupon level that slightly more established companies deserve.
Having said that, the coupon does look appetising in the current market climate given market demand for the past few local corp issues that have banked on name familiarity and they have been active in the local philanthropy scene : http://www.science.nus.edu.sg/press-releases/678-gift-of-s-1-million-from-singhaiyi-group-and-haiyi-holdings-to-boost-life-sciences-education-and-research-at-nus
I have their stock on my radar though….
Update : Books in excess of SGD400M
Hello TH,
1. Do you know if they have narrowed down the range of the indicative yield?
2. Completely unrelated subject: I see that price of the huge Deutsche and Credit Suisse Perpetual offerings that recently came onto the market have recently cooled quite a bit – and this in a rather hot overall corporate bond market. Any thoughts? Is it general unease at Euroland? Basel III compliant Euroland bank paper?
Thanks again – JC
Hey JC,
Yes. 5.25% last number for Singhaiyi.
As for the Coco price cooling, I pasted a link somewhere about BOE warning that customers are not fully aware of the risks of loss sharing perhaps last week. That and the articles warning about junk (for the DB and CS papers are rated junk), I suppose would be the main causes for slight risk aversion.
SINGHAIYI SGD 2.5YR
– Books in excess of S$800mm
– Final price guidance at 5.25% (the number)
– Issue size: S$100mm (will not grow)
Hi tradehaven, much sincere thanks for your sharing your insights and information. I will try to figure out how to calcuate the gearing and leverage from the financial information data sheet. Have a great week ahead!
Morning Price
Singhaiyi 5.25% 01/2017 100.55/100.75
Closing price 100.45/100.60
Hi tradehaven, I heard from one of my friends that Geo Energy may be issuing a new bond. Do you happen to have any news of it? 🙂 Btw may I just ask, what is the gearing and leverage of Geo Energy? Mind I also ask, is there any where that I can find a complete list of the “gearing” and “leaverage” of listed companies in sg? Thank you so much Tradehaven for everything again. Have a fantastic evening ahead.
Hi Nelson,
Geo Energy established a S$ 300 mio borrowing programme on 30 June so we should expect a new bond issue in the future.
It is a new company listed in Oct 2012 with a market cap of SGD 335 mio.
Their gearing looks pretty low based on their 2013 financial statements. But for small companies like these, a bond issue would bump up that gearing number in a big way.
You can work out their leverage roughly by referring to their financial statements which are available on their website or the SGX.
Are there by any chance you are related to drwealth?
http://www.drwealth.com/2014/07/02/singapore-corporate-bond-new-issue-singhaiyi-group-2-5-years/
Hi Nik,
We are one of their content partners.
Thanks for your alert though.