Hyflux is offering a 6% retail perpertual securities in May 2016

Water treatment firm Hyflux has launched an offer for up to $300 million in perpetual capital securities, paying out 6 per cent a year.

The bulk of the perpetuals - up to $230 million - will be offered to the public, the group announced yesterday.

Of the remaining, up to $20 million will be offered to directors, management and employees of Hyflux and its units, and up to $50 million will be set aside in placement to institutional and other investors.

Hyflux said that if the public and placement tranches are oversubscribed, it may increase the offering to a maximum of $500 million.

The distributions will be payable semi-annually in arrears on May 27 and Nov 27 of each year, with the first payment scheduled to be made on Nov 27 this year.

On or after the May 2020 payment, however, the 6 per cent distribution rate may be reset to a rate that is the sum of the four-year swap offer rate (SOR) on the relevant reset date, the initial spread of 4.2 per cent a year and the step-up margin of 2 per cent a year, added the group.

Currently, the four-year SOR is 1.8 per cent. If it remains the same in May 2020, the perpetual securities will pay 8 per cent a year.

Hyflux said a major part of the proceeds will be used to repay $100 million of its outstanding notes due this year, which were issued under the group's $1.5 billion multicurrency debt issuance programme, as well as $175 million of its outstanding perpetual capital securities.

The rest will go towards paying for expenses incurred by the offer and for "general corporate purposes", including the repayment or refinancing of existing borrowings.

Executive chairman and group chief executive Olivia Lum also said the perpetuals will allow the group to "build a strong war chest" for growth.

Applications for the public offer securities and the placement securities open from today until noon on May 25. The securities are expected to be issued on May 27 and to commence trading on May 30.
OCBC Bank Credit Research analysts told The Straits Times that Hyflux's existing preference shares were issued at 6 per cent in 2011 when "its leverage was lower and credit metrics better - so it's arguable if a 6 per cent coupon today for a more leveraged company is a good deal".

They added: "Perpetual prices are heavily influenced by interest rate risk, so if interest rates rise, then the price of the perpetual could fall."

Hyflux's offer follows closely that of Mapletree Logistics Trust, which said on Monday that it plans to issue $250 million in fixed-rate perpetual securities at a distribution rate of 4.18 per cent a year.
Ms Grace Lim, senior fixed-income analyst for investment strategy and portfolio expertise at ABN Amro Private Banking, said perpetuals offer companies a "cost-effective" way of obtaining long-dated funding amid low interest rates.

Hyflux shares - which have lost 32.2 per cent in the past year - closed half a cent or 0.9 per cent up at 56.5 cents yesterday.

Singtel's NETLINK TRUST to IPO next year

Singapore Telecommunications (Singtel) plans to list its broadband unit on the local bourse in a deal that could raise about $2 billion, slashing its stake by more than 75 per cent, sources close to the matter said on Thursday. One source said South-east Asia's largest telco is expected to appoint banks by the end of this year and the initial public offering of NetLink Trust could be launched in the second half of 2017. Singtel, whose largest shareholder is state investor Temasek Holdings, was given an April 2018 deadline by regulator Infocomm Development Authority to reduce its stake in NetLink Trust, which provides high-speed broadband network. The sources, who declined to be identified because the listing discussions are being kept private, said Singtel has been mulling a NetLink Trust IPO for years. But they said the company had yet to finalise valuations, set a time frame or appoint banks for the deal. "We do have a deadline that was given by Infocomm Development Authority that's by April 2018, we will work towards that timeline," Group CEO Chua Sock Koong said during an earnings briefing earlier on Thursday, declining to give further detail. The company did not immediately comment on the latest information about the deal. The Wall Street Journal had reported on Wednesday plans about the potential NetLink IPO. In a research note last month, Nomura said the enterprise value of NetLink could be between S$4 billion and S$4.5 billion, adding that it was likely to be listed by next year. Earlier on Thursday, Singtel reported a flat fourth-quarter net profit of S$946 million

Oxley Retail Bond 2nd Trenche at 5.15%

PROPERTY developer Oxley Holdings on Monday announced an offer of up to S$150 million of four-year 5.15 per cent bonds due 2020, to be issued and unconditionally and irrevocably guaranteed. This comprises an offer of up to S$125 million of bonds to the public in Singapore, and another S$25 million to institutional and other investors. In the event of over-subscription in the public offer and/or the placement, the issue size of the bonds may be adjusted, but the total issue size will not exceed S$300 million. The actual amount of bonds to be allocated between the public offer and the placement will be finalised on or before the issue date. DBS Bank is the sole lead manager and bookrunner for the offer.

Perennial Holdings 4.55% 4 yrs retail bond results are out, almost 100% allocation

If you have balloted for the Perennial 4.55%, chances of you getting a 100% allocation is pretty high. In the past I balloted 16 lots and I only get 10 lots.

This time round, I balloted 16 and I get the full 16 lots.

The units will be credited into your CDP account and trading will begin next Tuesday as Monday is a public holiday (in lieu for May Day).

So, did you get your allocated units ? Post your allocations in the comments section.

Manulife REIT placement for IPO at 82 cents and 6.5% yield pa

Just received word from my broker that there is an upcoming IPO for MANULIFE REIT.

MANULIFE is the insurer that everyone is familiar with. This time round they intend to list to acquire funds from Asia.

The suggested IPO price is $0.82 per share and dividend yield is expected to be around 6.5% pa.

The IPO isn't out yet but placement can be put up with your broker if they have some on hand. Give them a call to check it out.

Perennial Real Estate Holdings Retail Bonds 2nd tranche 4 yrs at 4.55% pa

Perennial Real Estate Holdings is right after Aspial to offer yet another tranche of retail bonds for the retail investors.

The firm is offering four-year bonds of up to $200 million - due in 2020 - with a coupon rate of 4.55 per cent. They might increase it to $300 million if the public offer is oversubscribed.

For IPO subscription, you can ballot for it with a minimum of S$2000 at the 3 participating bank's ATMs.

Application for the Perennial offer closes at noon on April 27. The bonds are expected to be issued on April 29, and be traded on the mainboard of the Singapore Exchange on May 3.

DBS Bank and United Overseas Bank are the joint lead managers and bookrunners for the offer.

So will you be balloting for it?

Aspial Corporation 5.3% retail bond tranche IPO, Closes on 30 Mar 2016

For those who missed the first retail bond offered by Aspial Corporation 5.25% last year, you will have a chance to ballot the second round this year.
The four-year, S$75 million issuance pays annual interest of 5.3 per cent, one of the highest rates rolled out here in years.

Aspial's latest issuance will set aside S$50 million for public offer, with a minimum investment of S$2,000 per application. A S$25 million placement tranche - for institutional investors - will require at least S$100,000 per application.

The offer opens at 9am Wednesday and closes at 12 noon on March 30. Aspial can expand the issue size to a maximum of S$200 million if the offer is over-subscribed. A 5.3 per cent annual payout, or coupon rate, is step up from Aspial's first issuance in August last year, when the jeweller and property firm rolled out a five-year, S$150 million issuance with a 5.25 per cent coupon rate.
Both coupon rates sit at the very top of the current crop of Singdollar retail corporate bonds. "The return is certainly very attractive, as is usual with non-investment grade offering," CMC Markets analyst Margaret Yang said, referring to the fact that Aspial is not credit-rated. "Individual investors will have to decide based on their risk appetite. But for a company to hit the retail bond market now makes sense, given that the interest rate uncertainties have dropped after the Federal Reserve said only two rate hikes are on the cards this year."

Those interested can apply through ATM machines from $2000 onwards or buy the corporate version at S$100，000 per lot from issuing parties. Do note that this is a high yield unrated bond which will mature in 4 year's time. The older retail bond at 5.25% is trading slightly below par at 0.995 cents which gives a yield of more than 5.25% right now.

Will you apply for this retail bond?