SGD New Issue Review : Frasers Centrepoint Perpetual NC5

Issuer:   FCL Treasury Pte. Ltd.
Guarantor: Frasers Centrepoint Limited
Issue: SGD Subordinated Perpetual Securities
Ratings: Unrated
Format: Regulation S only and S274/275 of SFA, SG; Issuance off  S$3 Billion Multicurrency Debt Issuance Programme
Issue Size:  Benchmark
Initial Price Guidance:  Low 5%
Tenor: Perpetual NC5
Ranking: Subordinated; Senior only to Issuer’s ordinary shares
Call Option: [ ] 2020 & at every distribution date thereafter at par
Distribution: Fixed. Reset in Year 5 based on prevailing SGD 5Y SOR plus the Initial Spread & every 5 years thereafter
Step up: 100bps in Year 10
Distribution Payment: Semi-annually in arrear, actual/365 (fixed)
Distribution Deferral:  At issuer’s discretion. Any deferred Distributions are cumulative and on a compounding basis
Dividend Pusher: Yes, with 6 month look back period
Dividend stopper:  Yes
Change of Control:  Securities may be redeemed in whole, but not in part, at par upon Change of Control, otherwise  Distribution steps up by 100bps
Other Redemption:  At par under taxation reasons, accounting reasons,  tax deductibility reasons, minimal outstanding amount reasons
Listing:  SGX-ST
Details: SGD250K/Multicurrency Debt Issuance Programme/Singapore Law/CDP
Timing: This week’s business, as early as today

– New Frasers Centrepoint Limited (FCL) SGD Perp announced
– Deal is significantly anchored by TCC Prosperity Limited
– Initial price guidance: Low 5%
– Issue Size: Benchmark
– Structure: Perp NC 5, reset in year 5, step up 100bp in year 10, dividend       pusher & stopper, deferred distributions are cumulative and compounding

– Timing: This week’s business, as early as today


FCLSP 4.88% Perp NC 5 callable 09/19: 100.60, 4.74%, SOR + 285 bps
FCLSP 3.7% 04/19: 100.50, 3.57%, SOR + 176 bps

The company is also currently syndicating a A$ 600 mio 5 year loan less than a week ago.

The spread for the 5Y was SOR + 115 bps but note that loan covenants are different from the bond programme and probably more stringent.

Moody’s just raised their outlook to positive on 17 Feb which is good news after their Q1 net profit jumps 55% to S$187 mio and analysts upgraded their recommendations to BUY for the stock.

Now this deal is significantly anchored by TCC which is a selling point because if bond coupons are not taxed while dividends are after tax.

Also, perpetuals count into the capital base and not into liability base which does not make their leverage look too bad.

Well, they  have upped their borrowing limit to $3 bio since their acquisition of Australand last year from Capitaland which means they have more to go and they will continue with the property developments to sell at a profit to Reits.

The Singapore budget helps because SReits have to look offshore these days and it is looking like a profitable future for them indeed (not sure about the Reit).

But at low 5%, it is nothing to scream about. Not especially with their fates tied to Australia.


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