Genting 5.125% Perpetual

With expectation of possible interest rate hike in December, investors are reluctant to buy any bonds.

Here is a SGD bond that pays a decent yield and has high likelihood of calling back the bond in Sep2017.

Once the bond is called back, invesors can reinvest the cash to buy bonds which trade at cheaper price if a rate hike does happen. If Genting does not call back the bond, this is still a healthy bond to invest. Because the company is at net cash balance sheet.

Bond details:

Genting 5.125% Perpetual
Price: 101.70
Yield to call: 3.15%
Yield to maturity: 5.67%

Even though this is a perpetual, the bond has call dates on Sep2017, Mar2018, Sep2018 & every Mar & Sep thereafter.

Company's cash & cash equivalent as at 2nd quarter 2016 is SGD4.8bil.

Company's total debt as at 2nd quarter 2016 is SGD1.547bil.

Hence company has the ability to pay off all of its debt. The company would not want to keep paying 5.125% interest to bond holders.

For this reason, they are likely to call back the bond in 2017 or 2018.

2 Attachments

Click here to Reply or Forward