SGD New Issue Review : International Healthway Corp 3Y 6%
INTERNATIONAL HEALTHWAY CORP 3Y SGD
– New 3yr SGD announced post roadshow
– Price Guidance at 6.00% area
– Anchors well in place
– Timing: As early as today’s business
** PB concession: 50c
– Comps:
Cordlife 4.9% 17 99.00 / 5.29%
Courts Asia 4.75% 16 102.38 / 2.79%
First Real Estate Investment Trust 4.125% 18 100.80 / 3.86%
International Healthway Corp., Ltd. is an integrated healthcare services and facilities provider. The Company owns, manages and operates hospitals and nursing facilities, mostly in Japan, China and Malaysia.
Market cap : SGD 448.9 mio, IPO in Jul 2013 at 48 cts, currently trading 0.275 cts and listed on Catalist. 2 analysts cover this stock with a strong buy and a sell call which is kind of strange. The company is obviously not on many radar screens.
Income dropped last year and earnings are barely enough to cover interest expense. Their profits from 2012 and 2013 came mostly from non operating sources. And in 2016 they will see increased earnings from their real estate business in KL and China where they are developing mixed use medical facilities combined with other commercial retail centres and service residences.
Now they in talks to buy a retail mall in Penang and I am not sure about their business model as highly geared as they are. This bond is supposed to be making up for some loans that are maturing which means banks are not willing to lend at 6% ? Wow, I am not sure what to make of that.
I have no strong view on this name. 6% sounds like a number to excite the retail client who better not be moaning like some readers about the illiquidity of their TA Corp etc.
Good luck !
Coupon will be under 6% it seems.
And btw, 2 key personnel left this month.
Executive director and financial controller.
This company has double-digit Debt/EBITDA levels (I stop counting after 10x) and is just generating enough income to cover interest expense. Interest expense is half of revenue and capex is way more than revenue. With such high debt levels I would also make a guess that most of their assets would be pledged for loans. That’s means as bond holders you could be senior unsecured on title but junior subordinated in reality. Even if one really believes in the growth prospects of the company, why not the equity?
I would steer far away from this name
My new philosophy is that everyone will get what they deserve.
Just $50m at 6%
might struggle a bit to stay afloat at 100
IHC 6% 02/2018 99.75/100.00
IHC 6% 02/2018 99.45/99.95 today. Is it because of Ciputra ??