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/