SGD New Issue Review : International Healthway Corp 2Y 7%


– New SGD 2Yr transaction announced at 7% (the number) on the back of significant anchor investor interest.

– Use of proceeds of the this transaction is to be fully applied only for refinancing of existing indebtedness. Leverage post transaction is expected to be unchanged.

– IHC has also undertaken that it would not be assessing the bond market (all currencies) for the rest of 2015 following this transaction.

– Expected issue size of S$50 million

Previous 3 year issue priced at 6% and now we have 2 years at 7%. And I do not appreciate the poor English in the brief write-up because “assessing” could not mean “accessing” ?

Current price of IHC 6% 2/2018 is around 97/98.25 (7.2/6.69%) which is a credit premium of 5.8%/5.25% when it was issued at a credit premium of approximately 4.75% implying a loss of about 1% for the investor since Jan.

Like I said in my Jan piece, I am not sure what to make of this company and their business model etc and equity investors did not have much to say about their IPO which I have been informed was a “blotched” one (although I also hear that the shares are worth a look now for “another reason”).

Jan Review :

The new paper will be delivering a credit premium of 5.78% because 2 year rates have fallen to 1.22% today which is not bad although I still do not know how to benchmark this name except against the old paper and that global credit spreads have generally compressed since Jan.

Debt/Equity 167%
Debt/Assets 59%

Thus I suppose 7% would be the magic number instead of 6% and that they will not be “assessing” the market again.