IFR Asia – April 28, 2018

COUNTRY REPORT PHILIPPINES

PHILIPPINES

DEBT CAPITAL MARKETS

› AYALA LAND TO PAY 5.92% FOR 10 YEARS

AYALA LAND has set the yield at 5.9203% to
raise Ps10bn (US$191m) from an issue of
10-year peso bonds, according to a press
release.
The interest on the bonds will be paid
quarterly.
The Philippine property conglomerate
has appointed BDO Capital & Investment Corp,
China Bank Capital Corp and PNB Capital and
Investment Corp as joint lead underwriters
and bookrunners.
The proceeds of the issue will be used to
meet general corporate needs and capital
expenditure.
The peso notes are rated Aaa by
PhilRatings. The bonds will be alloted on
April 27.
This will be the fifth batch of retail bonds
off Ayala Land’s SEC-approved debt-issuance
programme of Ps50bn.

SINGAPORE

DEBT CAPITAL MARKETS

› RHT GETS MAJORITY NOD

Singapore-listed RHT HEALTH TRUST has

obtained majority consent from holders

of its S$120m (US$91.6m) 4.5% bonds

due in July to sell assets to India’s Fortis

Healthcare.

Investors holding S$97.5m, or 81.25%,

of the 2018s had put in applications by

an early deadline last Monday to vote for

the resolutions put forward in a consent

solicitation on April 12.

The bondholders also approved a six-

month maturity extension of the bonds

from July 22, after which the outstanding

notes will be redeemed at 100.45 with

unpaid accrued interest on January 22 2019.

In addition, they approved a waiver of

certain events of default.

RHT, a provider of healthcare services in

India, agreed in February to sell its entire

portfolio of healthcare assets to Fortis

for Rp46.5bn (US$711m). The acquisition

requires, among other things, approval

from bondholders.

An early fee of 0.3% will be paid if

consent was given on or before April 23,

after which a normal fee of 0.2% will apply.

A bondholder meeting will be held on April

30.

DBS and UOB are joint solicitation agents.

› GSH SETTLES FOR S$50M

Singapore-listed GSH priced a S$50m three-

year note last Wednesday at 5.15%, inside

initial price guidance of 5.30% area.

The unrated notes will settle on May 3

and will be drawn from a S$800m multi-

currency MTN programme. Investors have

a put option if major shareholders Sam Goi

Seng and his immediate family members

cease to own a minimum stake of 35%.

DBS was sole lead bookrunner. Proceeds

will be used for general corporate needs,

including debt refinancing. The property

company had targeted a small issue with

a minimum size of S$50m. Shareholder

Sam and a number of senior company

officials will be allocated about 24% of the

deal.

CCRE returns to Singapore as costs rise

„ Bonds Chinese property companies searching for alternative sources of funding

CENTRAL CHINA REAL ESTATE , rated Ba3/BB–

(Moody’s/Fitch), returned to Singapore’s

bond markets last week after a four-year

absence, underscoring the appeal of the local

investor base for Chinese property companies

faced with challenging conditions in the US

dollar market.

CCRE sold S$150m (US$113.3m) of two-

year bonds at 6.25% last Tuesday, coming

after a S$200m 6.125% three-year non-call

two bond from from Logan Property Holdings

in mid-April.

“There are some Chinese companies

exploring the Singapore market, especially

since Logan and CCRE are keeping the door

open,” said a debt syndicate head.

“They are willing to pay up as they are

looking to fund anywhere they can. But they

will have to take note that investors are still

cautious and will only take the recognised

names.”

Both CCRE and Logan meet that criterion.

CCRE last raised funds in Singapore in 2014

when it sold S$200m three-year bonds,

which matured in 2017. It also has a strong

link to Singapore stalwart CapitaLand, which

has a 26.87% stake.

Meanwhile, Logan is building up a

presence in the island republic, having

won a tender for a residential plot near

Queenstown MRT station with a record bid

of S$1bn last May, and also succeeded in a

S$629m collective sale of Florence Regency

in Hougang in October.

Chinese property companies are facing

higher funding costs in the US dollar market

as a result of heavy supply and rising base

rates, pushing them to seek other funding

avenues.

Rival bankers said local demand had

fallen short of expectations for both issuers,

which had to settle for lower-than-targeted

issue sizes. Both CCRE and Logan are rated

similarly at Double B and had paid up to get

the deals done. Even then, the bonds traded

lower in secondary markets.

“PB investors have become very cautious

recently,” said another debt syndicate

banker. “There seems to be some migration

of PB funds into other assets, including

equities.”

Logan paid a premium of more than 62bp

over its US dollar curve for its Singapore

debut, while pricing for CCRE’s Singapore

notes looked flat to its US dollar bonds. The

8% January 2020s and 6.875% October

2020s were quoted at 6.82% and 7.11%. On a

post-swap basis, the levels would translate to

around 5.9%–6.2% for a two-year Singapore

dollar tenor – just a tad lower than where

CCRE priced its new bonds.

However, when compared with the

S$200m three-year non-call two bond

printed by Logan Property in mid-April at

6.125%, CCRE is paying a premium of over

10bp for a shorter tenor.

“Against the rest of the high-yield

Singapore dollar bonds in the property

sector, the new notes offer decent value,”

said Ang Chung Yuh, senior fixed income

analyst at iFast Financial. These included

Heeton Singapore’s 6.1% notes due 2020,

which were quoted at 5.53%, while Fragrance

Group’s 6.125% notes due 2021 were at

6.05%, according to Ang.

OCBC was sole lead manager on the

CCRE deal, which is guaranteed by some

of CCRE’s non-PRC subsidiaries and will

settle on May 2. Proceeds will be used to

refinance debt.

KIT YIN BOEY