SGD New Issue Review : Gallant Ventures 2.5Y 7.125%
NEW ISSUE: GALLANT VENTURE – SGD 2.5 YR ISSUE
Issuer: Gallant Venture Ltd.
Status: Senior, unsecured, off USD500m EMTN Programme
Rating: Unrated
Format: Reg S, S274 & 275 of Singapore SFA
Tenor: 2.5 Years
Issue Size: TBD
Initial Price Guidance: 7.125% area
Payment: Semi-annual, Actual/365 (fixed)
NEW 2.5YR ANNOUNCED ON BACK OF STRONG REVERSE ENQUIRY
PRICE GUIDANCE OF 7.125% AREA, OFFERING SIGNIFICANT PICK UP TO EXISTING SECONDARY
PB REBATE: 50CENTS
Comparables :
GALLANT VENTURES 5.95% 04/16: $100 / 5.94%
GALLANT VENTURES 5.9% 05/17: $99 / 6.37%
Here they come and now the coupon is talking at 7.125%.
2.5 years will lead them to 2017, the year they have SGD 1.01 bio due in loans and bonds. Some great cash management strategy they have.
Debts due :
2015 SGD 583 mio
2015 SGD 440 mio
2017 SGD 1.01 bio (excluding this bond issue)
2018 SGD 275 mio
Cannot say much about their financials because of their acquisition of the auto distribution that threw the first 9 months of 2014 into a loss, according to their latest announcement.
It would appear that their Bintan industrial parks are not doing too well etc.
The 2.5 year interest rate is approximately 1.03% today which means they are paying a nice premium of 6.09% for this money.
Alarm bells are ringing for me that Fragrance managed to pull off 3.75% for their 2 year money ??? !!!!! As geared as they both similarly are ? although Gallant is spending more of their profits on interest expense unless the revenues start streaming in.
But Gallant counts Sembcorp as a 11.96% shareholder as well.
But double the coupon ? 3.75% vs 7.125% ?
Think about it.
Links to last year’s Gallant Issues :
https://tradehaven.net/market/2-new-sgd-issues-gallant-and-rickmers-trust-3y/
https://tradehaven.net/market/2-new-sgd-issues-gallant-venture-2y-overseas-education-5y/
No dividends for shareholders for quite some time.
GALLANT VENTURE SGD 2.5YR
** FINAL GUIDANCE 7% THE NUMBER
Dear Tradehaven,
I am Newbie and this Bond Very Attractive @ 7% 100.25 to me.
Tempting to subscribe but 2.5yrs est yr 2017 (refer to the debts due from moderator)
Any advises or comments for subscribing it or other bonds alternatives? Thank you!
==============================
Debts due :
2015 SGD 583 mio
2015 SGD 440 mio
2017 SGD 1.01 bio (excluding this bond issue)
2018 SGD 275 mio
==============================
Their increased gearing comes from their recent acquisition of PT Indomobil Sukses Internasional Tbk (IMAS), an automotive business.
Gallant’s previous debts due :
2015 SGD 343 mio
2016 SGD 175 mio
2017 SGD 700 mio
And thus they are paying up for this new bond.
Mr Sgandi, it’s time to change RM, they wanna place it to you at 100.25 yesterday?
According to TH, yesterday’s cost was 99.5.
Cost to RM was 99.5 but clients get at 100.
Price is 99.95/100.05 now I believe.
In my early days, my first RM did mark up above 100 for new placement. I ended up paying 100.3 and 100.25 for a brief period of time for ALL new issues under the same RM.
After that, I learnt that MOST new placement are sold to clients at 100 on the first day. For 100.25, Mr Sgandi might be giving 0.5+0.25 commission like me in the old days.
Likewise when you wanna offload, you can try to get quotes from at least 2 different financial institutions, there’s usually a 0.1 price difference (including commission).
Hi Mr KH,
Noted thanks. That was yesterday 26/01 price. I was told the Bond deal close in today morning.
Thank you!
Gallant Venture Sells S$75m 2Y Bonds at 7%, Retail Buys 84%
Bloomberg — Priced at 7%, IPT 7.125% area.
29 accounts
By investor type
Retail 84%
Funds 5%
Banks/corporates 11%
By region
Singapore 96%
HK 4%
Gallant Ventures 7% 08/2017
99.90/100.10
Hearing may have a 100.05 bid. Cost price 99.50.
May I ask, for ta corp, price listed 23 jan is 99.33. My rm say selling price is 96.7. May I ask how come the different is so big
Hey Daniel,
The price is see is 97.95/99.05 but I am not sure if it is deal-able. Sometimes they leave a high price on the screen to keep people happy so they would not be tempted to sell.
Given that this is a highly illiquid bond where I suspect not more than 2 banks in Singapore would be able to make you a price in that, I apologise if our indicative price is off or nearer to the offer side.
Good luck !
much regret for the stupidity, what is illquid bond.
Illiquid means you cannot just go to any bank and ask for a price because they will tell you to take a hike.
You can only get prices at a few places and the bid-offer will be very wide for the reason that they know that no one else can be competitive.
Do u sell bond? How do u think of this company TA corp
http://52.77.202.71/market/sgd-new-issue-review-ta-corporation-sgd-2-5-yr-senior-unsecured/
I don’t think a lot or much about these names as they are not daily issuers.
If u sell bond , I buy from you
Need a securities license to do that.
But it can be arranged through a third party if there are enough participants.
How can I contact u, email? I holding ta corp, though price is a bit scary.
Hey Daniel,
Drop me a mail at tradehaven13@gmail.com
Will see if can help. No guarantees.
Hi , was asked if I want to Reserve by banker..There is a reopening on this issuance again on next Monday…meaning hotcakes?
any changes in your penny for a thought on this from a month
Re-opening at 100 ?
Bond is indicating a 100.375 bid though.
Hi TH,
Was told issued at 100 par +charges.
However, I was just informed it has been shelved..
Can’t help thinking If it is a secondary market deal that is to be proposed to me ..
Nonetheless thank you for replying:)