SGD New Issue Review : Aspial 4Y 5.625%

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Aspial is paying up !

2012
Jul   Aspial 3 year 5.2% SGD 85 mio
Sep Aspial 2 year 4.65% SGD 65 mio (matured)
* coupons revised higher due to covenant breach last year

2013
Jul Aspial 3 year 5% SGD 100 mio

2014
Jan Aspial 3 year 4.5% SGD 80 mio
Jun Aspial 5 year 5.05% SGD 130 mio

Today … Aspial 4 year 5.625% !!

NEW ISSUE: ASPIAL CORPORATION LIMITED SGD 4YR ISSUE

Issuer: Aspial Corporation Limited
Status: Direct, unconditional, unsubordinated and  unsecured Notes
Rating: Unrated
Format: Reg S, S274 & 275 of Singapore SFA
Tenure: 4 Years
Initial Price Guidance: 5.625%a
Issue Size: TBD
Payment: Semi-annual, actual/365 (fixed)
Redemption at Option of Noteholders Pursuant to Change of Shareholding Event:  In accordance with the Programme
Redemption at Option of Noteholders upon Cessation or Suspension of Trading of Shares: In accordance with the Programme
Redemption for Taxation Reasons:  Yes, in accordance with the Programme
Details: SGD250K/Multicurrency Debt Issuance Programme/ Singapore Law/CDP
Listing:  SGX-ST

– New Aspial SGD 4yrs announced. Deal is anchored
– Initial price guidance: 5.625% area
– Pb selling commission: 50cents
– Timing: This week’s business, as early as today

– Comparables:
Aspial 5.05 2019 at 98.75, 5.36% (around 4.5yrs remaining)
-> at ipg of 5.625%a 4yrs, there is good yield pick up over existing Aspial 2019

What they are saying is SORRY TO THOSE SUCKERS WHO HAD BOUGHT IN JUNE and it is not their fault and YOU BETTER BUY MORE TODAY TO AVERAGE DOWN AND MAKE UP FOR IT.

Please hand your money over to Aspial and if you don’t there is another person who will buy it. The deal is anchored anyway.

I have  a rule not be be too disparaging about companies with “money lending” affiliates because I suffer from the misconception that I could be unnecessarily a target for something I am not sure about. Do they all come from Geylang too ? Like the popiah king ?

Consolation : Aspial is doing better than Oxley !

Recent headline : Oxley’s Q1 net profit down 96% on revenue plunge

Aspial Recent Financial Highlights :

* Operating profit -75%
* Other income + bank interest/affiliate +300%
* Net profit -63%

Well, they have a lot going for them in the coming quarter which mostly hinges on the sales of their Australia 108, the tallest sky scrapper in the Southern Hemisphere, where they have 1,105 units to sell for over a billion bucks after paying $42 million for it earlier this year. It is also, incidentally, in the top 10 most unaffordable cities in the world (http://www.bloomberg.com/news/2014-10-29/skyscraper-boom-in-australia-s-second-largest-city-signals-glut.html) and in a part of town I suspect to be flood prone (having mentioned it in https://tradehaven.net/market/fx/australia-focus-the-real-estate-romance/)

But thanks to Aspial and GIC, I saw the demise of the AUD dollar. https://tradehaven.net/market/fx/international-focus-australia-the-unloved/

For it is all about property at Aspial now.

ASPIAL BUSINESS SEGMENTS

ASPIAL BUSINESS SEGMENTS

 

The MaxiCash subsidiary is also not in a position to be borrowing much as noted a few months back and we note tight cashflow conditions (https://tradehaven.net/market/tricky-cashflow-balancing-acts-singapore/). I also noticed the profits dropping for the smaller finance firms like Hong Leong Finance which posted a profit drop of 28% recently.

Aspial is one of the more highly leveraged real estate firms around town, falling short of Oxley, the champion of course. But nonetheless still maxed out at 4.5 times (last count in 2013) on their financial leverage ratio and with Debt/Equity at 224% (then). Market Cap : SGD 769 mio.

Since we pointed them out last year, their interest coverage ratio appears to have worsened. https://tradehaven.net/market/presenting-singapores-potentially-over-leveraged-corp-bonds/

And earlier last year, there was a consent solicitation exercise to loosen their borrowing covenants. https://tradehaven.net/market/aspial-bond-surprise-consent-solicitation/

More background information to Aspial : https://tradehaven.net/market/sgd-new-issue-review-aspial-5y-low-5/

They also bravely did a 5 mio share buyback in September so I sincerely hope the proceeds of this issue will not go towards that end.

Back to this issue, 5.625% ?

(Note that they cannot borrow any more than SGD 105 mio in any case because their MTN programme is set at $500 mio…. unless they increase it again. )

Take a queue number, please. There is still GITI, Grand China Air, Tata, Ezion and rest paying much more.

Good luck !

 

 

Category : Market, Rates/Bonds