SGD New Issue Review : Swissco 3.5 Years 6%

Swissco to Sell SGD 3.5Y Bonds

Oct. 8 (Bloomberg) — May price today.
• Issuer: Swissco Holdings Ltd.
• Not rated
• Expected issue size: S$80m – S$100m

Market Cap : SGD 678 mio
Swissco Holdings Ltd. is an offshore oil and gas marine services provider.  The Company provides marine logistics-related assets, which comprise mainly of vessels, as well as associated offshore vessel chartering and marine logistics and support services.  Swissco also provides logistics outsourcing
services.

Saw a 5 year high in stock price for the last quarter which means it is good time to ISSUE SOME BONDS !

I somehow have a mental disconnect between the Swissco company name (changed in Sep 2010 from C2O Holdings to Swissco Holdings) and the fact that they are not making winter Olympic apparel. Possibly F&B business or even watches ?

List of competitors.

The financials are in pristine shape mostly, having recently turned profitable and transferring to the main board of the SGX after spending about 9 years in Catalist (SESDAQ).

Financial Leverage 2 times (ASL Marine & Ezra & Ezion  all 2.9X ). More than enough revenues to cover interest and Debt/Equity of 70%.

A little weak on the liquid assets side of things, without only 0.5 times to meet current liabilities which is the reason for this bond issue, I guess.

They are in a phase of rapid expansion buying the first liftboat (boat with a LIFT) for SE Asia and another 4 rigs.

Yes they need money but the good thing so far is that their MTN programme is $300 mio, quite small if we compare with Vallianz and Swiber and gang.

Warning : Cheap money can be addictive. Look at Swiber.

Risks : The usual vulnerability to contract delays and cancellations. Eg. ASL Marine’s income fluctuation earlier this year on their delay which led to the cancellation of an order. https://tradehaven.net/market/sgd-new-issue-review-asl-marine-sgd-4yr/

Comparing this bond to ASL Marine’s 4 year at 5.35% ??? (indicated at 99.30/99.80  5.55/5.41%)

Not good … errrr, for ASL.

This bond should be an easy sell, I guess. The PB rebate is a nice one in such turbulent times.

Good luck !