SGD Bond Reopening : Gallant Ventures 7% 04/2018
RE-OPENING: GALLANT VENTURE SGD 7.00% NOTES DUE 2018 –
– Re-opening of gallant venture SGD 7.00% Notes due 2018
– Re-opening Price: 100.00
– Re-Opening Size: TBD
– Timing: as early as today
Comparable
GALVSP7 04/18: 100.00/100.50
Sad for existing bondholders who have seen the price of this paper go up to 101 after issuance only for it to go KAPUT back to 100 with this re-opening. Congrats to those who sold at the high ! And now can buy back lower.
95% of previous issue went to private banks !
SGD 575 mio in outstanding bonds with the MTN size USD 500 mio which means they cannot issue more than SGD 93 mio or thereabouts.
Read what I said about their debt and their finance costs here last month : https://tradehaven.net/market/sgd-new-issue-review-gallant-venture-3y-low-7/
Share price has fallen since April.
Still, this is a household name that investors are mostly familiar with which means that 7% will be a big carrot especially with bond markets back in comfy zone.
I would not overly expose myself if I already have some paper but today’s credit spread is wider at 5.37% (3 year interest rates at 1.63% compared to 1.74% when they issued last month) which is not too bad considering the Golden Agri deal yesterday and everything else coming in tighter than usual.
Good luck !
Thanks again TH, “Interesting” that Gallant are prepared to potentially alienate existing holders of their 2018 7% paper (the banks??) for such a comparatively small re-tap issue (cf.. It would be interesting to see the impact on the pricing of their 2017 7% paper as well – do you have the latest prices at hand? Cheers, JC8888
Hey JC,
Not much impact as far as I can see and not a lot of trading. The 5.9% 2017 and 7% 2017 both adjusted about 0.2cts lower.
Perhaps they know it would be temporary ?
We, the Singapore bond-investing-public, can be very forgiving. Or I wonder if it is the Banks who were incentivised to forgive this time. We’ll see.
On the other hand ….Bond-holders can be fickle – I know more than a few who will not go near any of Noble’s paper, not so much because of the on-going Iceberg saga but rather because of the less-than-wholesome manner in which Noble Group treated their Perp holders, once the pricing had gone someway above par – i.e. call using a “technical out”.
Cheers again, JC8888
There will always be a new investor for the same issuer and the best example is Asia Pulp and Paper. Few remember their notionals wiped out to 1 ct.