SGD NEW ISSUE REVIEW : CENTURY SUNSHINE 3YNC2 7.25%

  • Issuer: Century Sunshine Group Holdings
  • Guarantors: In accordance with program
  • Reg S, not rated
  • OCBC

Century Sunshine Group Holdings Limited (509 HK) is involved in the business of research and development, production, and sale of bio-organic fertilizers in China. The Company offers a broad range of branded bio-organic fertilizer products.  The group is also involved in magnesium alloy production, from mining , smelting, ingot manufacturing, alloy and master processing to distribution.

Mkt Cap : HK$5.45 bio

7% is the magic number for the Singapore private banking world whether it be oil companies, agricultural chemicals or real estate.

Now, 7.25% would make this the highest coupon we have seen for 2015 ! Wouldn’t that be nice ? And it is their virgin bond issue which they have decided to place in Singapore.

Do note that the company did 2 convertible bond issues last year – 1Y HK$ 115 mio due 27 Jun 15 placed out to CCB and a 2Y HK$180 mio due 27 Jun 2016 placed out to China Everbright Asset Mgmt. Strike price for both HK$1.20, current mkt price HK$1.23.

And while we are obsessed with parentage, guess who is a stakeholder in the company with a 11.47% stake ?

IFC – International Finance Corp (AAA/Aaa), a member of the World Bank Group.

Wouldn’t this put the 3 other 7% bonds this year to shame ?

International Healthway Corp 7% 04/2017 current price 98.50/99.50 (7.86/7.28%)
GALLANT VENTURE 7% 04/2018 current price 99.75/100.25 (7.09/6.9%)
HNA GROUP 7% 03/2017 current price 99/99.75 (7.59/7.14%)

There is little else to say about this company given that this is their first foray into the bond markets and they wisely chose Singapore. With little analyst coverage out there it means that liquidity will not be forthcoming so it will be a buy and hold scenario and investors would be 100% vulnerable to Chinese risk in case of another scandal etc.

The coupon speaks for itself !

Good luck !