SGD NEW ISSUE : Ezion SGD 5Y 4% Committed Funding Backed Notes

NEW ISSUE: EZION HOLDINGS – SGD COMMITTED FUNDING BACKED NOTES DUE 2020

ISSUER: Ezion Holdings Limited
SERIES:  009
STATUS: Direct, unconditional, unsubordinated and unsecured Notes, issuance off the S$1.5 Billion Multicurrency Debt Issuance Programme
RATING:  Unrated
FORMAT:  Reg S, S274 & 275 of SFA
ISSUE SIZE: TBD
TENOR: 5 years
ISSUE DATE: [ ] August 2015
MATURITY DATE: [ ] August 2020
INITIAL PRICE GUIDANCE: 4% area (changes subject to market condition and demand)
USE OF PROCEEDS:  In accordance with the Programme
COMMITTED FUNDING:  Please refer to the attached Pricing Supplement
COMMITTED FUNDING PROVIDER:   DBS Bank Ltd.
PRE-FUNDING:   Please refer to the attached Pricing Supplement
REDEMPTION AT OPTION OF NOTEHOLDERS UPON CESSATION
OF TRADING OF SHARES:  At par, please refer to the attached Pricing
Supplement
MANDATORY REDEMPTION UPON PRE-FUNDING FAILURE:     At par, please refer to the attached PricingSupplement
MANDATORY REDEMPTION UPON COMMITTED FUNDING CEASING TO BE ENFORCEABLE:    At par, please refer to the attached Pricing Supplement
REDEMPTION FOR TAXATION REASONS:  At par, in accordance with the Programme
PAYMENT:  Semi-annual, actual/365 (fixed)
DETAILS: SGD250K/Multicurrency Debt Issuance Programme/Singapore Law/CDP
LISTING: SGX-ST
SOLE LEAD MANAGER & BOOKRUNNER: DBS Bank Ltd.
TIMING: Today’s business

–  New Ezion Holdings SGD 5yr Committed Funding Backed Notes announced
–  Strong IOIs received from real money accounts
–  IPG at 4% area
–  Rating: Unrated
–  Timing: Today’s business

Comparables:

DBSSP2.246 07/19 (AA-): 100.37, 2.15%, Z + 65, SOR + 45
CHRESO2.125 10/17 (Aa1): 100.15, 2.05%, Z + 108, SOR + 95
LEADIJ2.93 02/20 (AA-): 100.00, 2.93%, SOR + 79

5 year interest rate 2.225%, so this Ezion, at 1.775% premium, is easily double the credit spread that Logindo Samudramakmur (LEADIJ), subsidiary of Pacific Radiance. The Logindo issue is backed by a SBLC from UOB.

Yet, this is not an SBLC but viewed similarly and we would have to go into details to discern any differences.

So, 4% for 5 years ? It is high for DBS, whose 5Y notes are paying Libor+0.52%.

I say this makes a good and strong case for secondary Ezion prices to widen out especially when I note that those Ezion 2019-2021 papers are trading between 4.3-5.7%. And what about all those 5Y 4%-ish bonds like Guoco and weaker Reits ?