Tactical Bond Idea

Global Logistic Properties 3.875% 4Jun2025
Cust price: 93.50
Ccy: USD
YTM: 4.82%
Moody's: Baa2
Fitch: BBB+

Global Logistic Properties Limited (GLP) is one of the largest operators of modern logistics centers globally, with operations in China (Aa3 negative), United States of America (Aaa stable), Japan (A1 stable) and Brazil (Ba2 negative). At 30 September 2016, the company had 15.8 million square meters (sqm) of completed gross floor area across China, 15.6 million sqm in the US, 4.7 million sqm in Japan, and 2.6 million sqm in Brazil.

The company listed on the Singapore Stock Exchange in October 2010. The Government of Singapore Investment Corp (GIC, unrated) — Singapore's sovereign wealth fund — is the single largest shareholder, with a 36.9% stake at 6 January 2017.

Source: Moody's


Bond price for this bond has fallen from 104.00 to 94.00. Reason is because of takeover speculation. Market worries that GIC may sell off their shareholding.

Suitors include:
- Warburg Pincus consortium
- Blackstone
- Chinese PE firm Hopu Investment Management

First round offer by early February.
At this moment, this takeover deal is not firm yet.


Bloomberg writes about GLP:

"A private equity firm could reap huge gains from selling parts of Global Logistic or partnering with one of its big Chinese tech customers like Alibaba Group Holding Ltd. or JD.com Inc. and eventually having them take assets off its hands. Before deal chatter surfaced in November, Global Logistic was worth about what it was when it went public in Singapore back in 2010. A strategic investor that could combine its own tech or retail assets with those of the company could unlock real value."

https://www.bloomberg.com/gadfly/articles/2017-01-15/singapore-s-rare-buyout-bird

For investors going long on Asia, logistics offers a direct play into the urbanization story as Asian consumers seek developed-world standard of goods and services,” Priyaranjan Kumar, regional executive director of capital markets at Cushman & Wakefield Inc. in Singapore, said by phone Thursday. “It is not surprising to see the likes of Warburg Pincus wanting to take advantage of market dislocations and further strengthen their Asia platform.”

https://www.bloomberg.com/news/articles/2017-01-12/blackstone-said-to-be-considering-bid-for-singapore-s-glp








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