SGD CORPORATE BONDS : THE CALLS AND THE MATURITIES of 2015
Lots of hype about Swiber, first buying 750k of their perpetuals in the open market and now a formal announcement that they would be calling back the entire perpetual issue in September this year. http://www.businesstimes.com.sg/companies-markets/swiber-confirms-plans-to-call-perpetual-bonds
A bold move for the company, considering they have a maturity of $95 mio coming up next month for their senior securities that was issued in 2012 and last seen with an indicative yield of 18%.
Here is the list of maturities to look out for in the months ahead.
At a quick glance, Ezra is under more pressure than Swiber because they have a $225 mio maturity due in Sept besides their callable perpetual of $150 mio in the same month. In total Ezra has only $620 mio in bond debt but Swiber has close to $1 bio due between now and 2018.
It should be a tight race, noting that both companies have less than $200 mio in cash on last check though Swiber did a rights issue back in Feb this year.
Bond markets remain frozen for these O&G shippers at the moment thus I would expect some bank bridging loans to come in handy.
The 2015 maturity Swiber bonds have rallied this morning and the perp appears to be bidded higher (with no offers) than the rest of the senior papers.
Good luck !
TH,
So reading between the lines, do you think Swiber’s move to buy in just 3 lots of the perp was a stunt of some sort? What I mean is that, if they were serious about saving money by buying in cheap, they should have been able to lock in significantly more lots since the offer price surely would have been meaningfully less than 100 given the poor market outlook for the stock?
And if you have a minute to help check, do you know what the bid / offer prices for the June 2015 maturity issuance is right now?
Thanks
No. Not accusing them of pulling wool over eyes or anything of that sort. If anything it was good publicity especially if they intend to replace the bonds with more bonds ?
The price of the Swiber 06/2015 is hardly reassuring, going at 96.95/100.05 47.67%/5.43% though I am not sure if there are offers as people will be happy to hold it for just another month. I wonder why they wouldn’t shift the bid to 100 ?
Hi Tradehaven,
Bloomberg seems to also said that Ezra plans to pay off their perpetual notes as well and refinance. Appreciate if you have come across this plan by Ezra.
“Ezra says it plans to pay off the notes and refinance, their yield has surged more than 200 basis points over the last year to 14.2 percent, suggesting it may be costlier to replace them.” http://www.straitstimes.com/news/business/markets/story/singapore-perpetual-bond-investors-hope-never-means-three-years-20150505
Ezra reports proposed renounceable underwritten rights issue and issue of convertible bonds to raise proceeds of up to $300m.
Proceeds will be used to repay S$225m fixed rate notes and S$150m perpetual securities
Repayment of above-mentioned securities will reduce Ezra’s net gearing thereby strengthening its balance sheet and putting co. “in good stead to tap future growth opportunities,” according to statement from Ezra.
http://www.financeasia.com/News/398062,ezra-to-raise-up-to-300m-via-cb-rights-issue.aspx
Monday June 8th: the day that Swiber’s 6.25% p.a. note matures – lets see. And in three months time ………. September will be an “interesting month” for some key O&G notes – what with calls? (or no calls with eye-watering step-ups?) in respect of perpetuals from Ezra, Ezion & Swiber and the maturity of a straight Ezra note. Cheers JC 8888
Swiber Holdings Limited (the “Issuer”) wishes to announce that it has redeemed in full the S$95,000,000
3-year Fixed Rate Notes due 2015 (ISIN Code: SG6V26982490) (“Notes”) on 8 June 2015, being the
maturity date of the Notes.
The above redemption is not expected to have a material impact on the net tangible assets or earnings per
share of the Issuer for the financial year ending 31 December 2015.
By Order of the Board
Thanks TH – I had a glass of wine with my lunch today, after reading your 12.17 p.m. posting that is. Cheers JC8888
KEEP CALM
and
DRINK WINE !