SGD New Issue Review : Dyna-Mac Holdings Ltd 3Y 4.75%

ISSUER    :    Dyna-Mac Holdings Ltd.
STATUS    :    Direct, unconditional, unsubordinated and unsecured Notes
ISSUE SIZE    :    TBD
FORMAT/DOCS    :    Reg S, Sections 274 and/or 275 of the SFA, issuance off SGD 300 million Multicurrency Medium Term Note Programme
RATING    :    Not Rated
INITIAL PRICE GUIDANCE    :   4.75% area
TENOR    :    3-Year
INTEREST PAYMENT    :   Semi-annual, actual/365 (fixed)
REDEMPTION AT THE OPTION OF ISSUER
UPON DELISTING    :   Pease refer to attached investor termsheet
REDEMPTION AT OPTION OF NOTEHOLDERS UPON DELISTING AND SUSPENSION    :    Yes, at par
REDEMPTION FOR TAXATION REASONS    :    Yes, at par
DENOMINATION    :    SGD250K
GOVERNING LAW    :    Singapore Law
LISTING    :    SGX-ST
CLEARING    :    CDP
SELLING RESTRICTIONS    :    Reg S, Sections 274 and/or 275 of the Singapore SFA
TIMING    :    As early as today’s business

Dyna-Mac Holdings Ltd. offers engineering, procurement and construction services to the offshore oil and  natural gas, marine construction and other industries.  The Company builds topside modules for floating  production storage and offloading, semi-submersibles, manifolds, buoys, process piping, and tanks for petrochemical and pharmaceutical plants.

Market Cap : SGD 382 mio.  Keppel stake 24.43% (dropping from 25% in Jun 2014), Temasek with a small stake of under 1%.

They recently increased their paid up capital and is in the process of bidding for some contract work from BW Offshore, together with Keppel and Sembcorp Marine.

Newly listed back in 2011, its share price has seen better days and the company pays dividends of 5.19%.

dynamac share price

2 analysts covering the stock rate it as a BUY and Overweight, respectively.

Initial thought on share price – Who do they think they are ?

Even good old Nam Cheong came at 6% for their maiden 3 year issue, followed by 5% for their 4 year bond. Ezra just did a 2 year at 4.75%.

Is Dyna Mac trying to pass off as a blue chip with their clean balance sheet, low financial leverage (1.6 times), steady income stream and GLC connection ?

YES.

Googling their board of directors, we see a lot of active directors that have close links to the GLC circle.

That is good enough to explain it for me.