SGD New Issue Review : Kris Energy 4 Year 6%

KRISENERGY 4YR SGD

NEW 4 YEAR KRISENERGY SGD BENCHMARK ANNOUNCED
PRICE GUIDANCE: 6% AREA
MINIMUM CASH COVENANT INCREASED TO USD20MM – COVERS MORE THAN ONE YEAR OF DEBT SERVICE OF NEW SGD NOTES & OUTSTANDING 2017 BONDS

I have to apologise because I saw this announcement earlier today but clean forgot about it which does not mean I believe it is not worth mentioning.

As it is, the books are at 1.6 bio and the issue size will be fixed at SGD 200mio and at a coupon of 5.75%. For those who are interested, their MTN programme is for SGD 500 mio and they have used up SGD 330 mio in 2 months.

Still banking on Keppel’s 31% stake, I guess there is nothing more to comment on because the company is new and unproven. But PM Lee did singled them out as an impressive company last night in the National Day Rally speech.

My previous opinion on their 3 year note holds. https://tradehaven.net/market/sgd-new-issue-review-kris-energy-3y-6-5/

They are also warning us not to expect miracles with convenant “- Consolidated EBITDAX / Consolidated Interest Expense ≥ 1.5x until 31 Dec 2015, and ≥ 3.0x thereafter”. Meaning we should not see results till end of next year. Then again bondholders are not shareholders.

The old bond Kris Energy 6.25% 06/2017 is trading at 102.20/102.90 5.87/5.12%.

It is a mighty expensive paper if you ask me but I am hearing that private bankers are hawking this like there is no bond left on the street.

Good luck.