SGD Corporate Bonds Update : PCRT Privatisation
Just an update to those who may be concerned.
Dec. 18 (Straits Times) — SINGAPORE – Developer Perennial Real Estate Holdings (PREH) has amassed more than 90 per cent of its sponsored unit, Perennial China Retail Trust (PCRT), as at Wednesday.
This means that the Singapore-listed PCRT has lost its free float requirement, where at least 10 per cent of its total units have to be held by the public.
PREH, which has real estate assets in China and Singapore, does not intend to take steps to preserve the listing status of PCRT on the Singapore Exchange mainboard.
The PCRT units will be suspended from trading on Dec 23, after the buyout offer closes the day before.
The prospectus has stipulated that the bond holders have the option to request for a redemption.
Extract :
Redemption Option in the event that PCRT ceases to be listed :
If on any date, (a) the Units cease to be traded on the SGX-ST or (b) trading in the Units is suspended for more than seven (7) consecutive days on which normal trading of securities is carried out, the Issuer shall, at the option of the holder of any Note, redeem such Note at its Redemption Amount (together with interest accrued to the date fixed for redemption) on the date (or, if such date is not a business day, on the immediately preceding business day) falling 45 days after (in the case of (a)) the date of cessation of trading or (in the case of (b)) the day immediately following the expiry of the seven-day period.
If on any date, (a) the Units cease to be traded on the SGX-ST or (b) trading in the Units is suspended for more than seven (7) consecutive days on which normal trading of securities is carried out, the Issuer shall, at the option of the holder of any Note, redeem such Note at its Redemption Amount (together with interest accrued to the date fixed for redemption) on the date (or, if such date is not a business day, on the immediately preceding business day) falling 45 days after (in the case of (a)) the date of cessation of trading or (in the case of (b)) the day immediately following the expiry of the seven-day period.
Latest Indicative Prices of PCRT Notes :
PCRT 5.25% 07/2016 99.75/100.75
PCRT 6.375% 09/2015 100.25/100.75
Hi tradehaven, thank you so much for all the wonderful write-ups again. They have certainly provided everyone with loads of valuable information and insights. Thank you so much.
May I seek your view on switching of some of the bonds i currently holding.
I am wondering if it is a good idea to switch from Senior bond Olam 6% Oct 25 2022 to Olam 7% perpetual Callable 2017 March? Their yield to call and maturity seems to be about the same presently (about 5.4) from the latest bond price guide. I am wondering what is the refix going to be like in 2017 if Olam doesnt redeem the bond in 2017. I am wondering based on the projected SOR in 2017, what would be a plausible coupon rate they give in 2017 if it is not redeemed? I am thinking from current situation, it seems not very likely for Olam to default. So by switching from the Oct 2022 to Perpetual paper, if Olam does redeem the perpetual in 2017, I have nothing much to lose, since by that time the interest rate is probably much more and it is quite easy to get a bond giving 6% yield. On the other hand, if Olam does not redeem back, I will get a very high coupon from the perpetual paper. So it is a win-win situation for me if i switch. Thank you so much Tradehaven,
Hey,
Olam Perp does not have a refixing till 03/2022 so you will stick to 7% till then if the paper is not called in 03/2017-2022 and 09/2017-2021.
Hi tradehaven, much thanks for your kind reminder. I always thought it has refix in 2017. I have been thinking of switching Hyflux 6% callable April 2018 to either hyflux 5.75 callable 2017 jan or hyflux 4.8% callable 2016 too. not sure if they have refix in 2017 or 2016. Cos hyflux 5.75 and 4.8 are trading at very low levels now.
I am not sure if you want to cross those very wide bid-offer spreads to do that. Unless your bankers offer you a mid price switch.
Thanks for the kind reminder. I will check with my banker again. Have a wonderful day ahead and merry xmas in advance
Hi Tradehaven
When a new bond is issued, the early redemption convenant is set at a premium of a few % over 100. However, if when such bond’s price dropped drastically to say around 80, can the issuer redeem the bonds at around 80+ before maturity? Thanks
Issuer would need to conduct open market purchase because some people may not want to sell.
Olam did it before.