SGD New Issue Review : MAGIC 7Y 3.5%

MAPLETREE GREATER CHINA COMMERCIAL TRUST 7Y SGD: PX GUIDANCE @ 3.5% AREA

* NEW 7YR SGD ANNOUNCED DRIVEN BY REVERSE ENQUIRY
* PRICE GUIDANCE AT 3.5% AREA
* AS EARLY AS TODAY’S BUSINESS

Comparable Bonds
Mapletree Commerical Trust Baa1 S$100M 3.25% 2023  @   101.35  3.06%  I+86
MAGIC Baa1 S$75M  3.20% 2021  @   100.20  3.17%  I+108

3.5% is not bad.

Last August we only saw 3.2% coupon and 7 year interest rates are barely 0.08% higher since.

Our review of the previous bond : https://tradehaven.net/market/sgd-new-issue-review-mapletree-greater-china-commerical-trust-7y/

Singtel (Aa3) came out 2 days ago at 2.72% for a 6.5 year paper and we saw a 30Y government bond auction that delivered a 1.5% windfall to investors yesterday (priced at 97.93 vs current market price 99.50).

Mapletree Greater China share price is also looking good, finally breaking back above $1 this year and at its highest since June 2013 after  its IPO in Mar 2013.

MAGIC STK PRICE

Indicated dividend yield is 6.08% but analysts are turning neutral on the stock.

Why does MAGIC look good today then ?

Because of this.

7 year interest rate swaps

7 year interest rate swaps

 

7 year interest rates have collapsed by 0.2% since Humphrey Hawkins.

But 3.5% is still the decent sort of absolute return that portfolios are looking at these days for a non junk name.

Good luck.