SGD New Issue Review : Banyan Tree 5Y 5%

  • Issuer: Banyan Tree Holdings Ltd.
  • Reg S, unrated
  • CIMB, HSBC

banyan tree profits

Last looked at them last year when they came for a 5 year bond at 5% exactly 1 year ago today on the superstitious 28 May day. They finally priced at 4.875% then with 5 year rates at 1.57%. https://tradehaven.net/market/sgd-new-issue-review-banyan-tree-5y-5/

We are looking at 5 year rates of 2.06% today.

Half of their income goes to paying interest and revenues are not growing.

Still not too bad until I realise that they have upped their MTN borrowing limits to S$ 700 mio (from S$ 400 mio) and their market capitalisation is…. S$ 399 mio.

Yet we are looking at pedigree these days and with the Qatar Invesment Authority (9th largest sovereign wealth fund in the world compared to  GIC 8th and Temasek 11th) holding nearly 27% of the company since Mar 2014, it cannot do very bad ?

Comparables

Banyan Tree 4.875% 06/2019 100.50/101 4.74/4.6%
Hotel Properties 3.88% 04/2020 100.50/101 3.77/3.65%

The price is fair compared to the 2019 Banyan paper, coming out at about the same spread for the additional year in maturity although the credit spread is a tad tight probably for its name familiarity in local bond space with institutional demand.

Not screaming for joy but I suppose this is would look half decent compared to the recent Soilbuild and Guoco etc, not to mention the Oxleys and Aspials.