BOND THREAD

[samuelk]

anybody went with Tata Steel?
Tata Steel S$ 10Y - Initial Guidance 5.25% area
Update
- Initial guidance of 5.25% area for a new S$ 10Y transaction
- Expect Today's Business

Issuer: ABJA Investment Co. Pte. Ltd.
Guarantor Tata Steel Limited
Structure: Fixed Rate Senior Unsecured Notes
Issue rating: Unrated
Guarantor rating: Moody’s: Ba3 (Negative) / S&P: BB (Negative) / Fitch: BB+ (Negative)
Format: Regulation S
Tenor: 10 years
Size: SGD Benchmark
Initial Guidance: 5.25% area
Change of Control: Change of Control put at 100%, if (1) persons other than those controlling the Guarantor as of the Closing Date, acquire >50% of Voting Rights in the Guarantor, and a Ratings Decline occurs; (2) the Guarantor consolidates with or merges into or sells or transfers all or substantially all of its assets, and a Ratings Decline occurs; (3) the adoption of a plan relating to the liquidation or dissolution of the Guarantor; or (4) the Guarantor ceases directly to own 100% of the share capital of the Issuer or adopts a plan relating to the liquidation or dissolution of the Issuer
Details: S$ 250k x S$250k / English Law / CDP / SGX Listing
Joint Bookrunners: Nomura, The Royal Bank of Scotland and Standard Chartered Bank (B&D)
Joint Lead Managers: Nomura, The Royal Bank of Scotland, Standard Chartered Bank, and SBI Capital Markets
Timing: As early as today
Netroadshow Details: http://www.netroadshow.com; Access code: Tata2013 (not case sensitive)

[cbsh38584]

Congrats....very good money...
with 50% LTV, the profit is 8.825% + 5.5 times 2......wow!!!!!!!!!!!!

It was 10 times oversubscribe for this Kaise group Chinese developer during the IPO mths ago. It can go up fast. It also can go down fast. Cannot be greedy.

rdgs,
Vic

[starrynight]

Not interested in this. 10 years too long, given the interest rate expectations after 2015, etc.

anybody went with Tata Steel?
Tata Steel S$ 10Y - Initial Guidance 5.25% area
Update
- Initial guidance of 5.25% area for a new S$ 10Y transaction
- Expect Today's Business

Issuer: ABJA Investment Co. Pte. Ltd.
Guarantor Tata Steel Limited
Structure: Fixed Rate Senior Unsecured Notes
Issue rating: Unrated
Guarantor rating: Moody’s: Ba3 (Negative) / S&P: BB (Negative) / Fitch: BB+ (Negative)
Format: Regulation S
Tenor: 10 years
Size: SGD Benchmark
Initial Guidance: 5.25% area
Change of Control: Change of Control put at 100%, if (1) persons other than those controlling the Guarantor as of the Closing Date, acquire >50% of Voting Rights in the Guarantor, and a Ratings Decline occurs; (2) the Guarantor consolidates with or merges into or sells or transfers all or substantially all of its assets, and a Ratings Decline occurs; (3) the adoption of a plan relating to the liquidation or dissolution of the Guarantor; or (4) the Guarantor ceases directly to own 100% of the share capital of the Issuer or adopts a plan relating to the liquidation or dissolution of the Issuer
Details: S$ 250k x S$250k / English Law / CDP / SGX Listing
Joint Bookrunners: Nomura, The Royal Bank of Scotland and Standard Chartered Bank (B&D)
Joint Lead Managers: Nomura, The Royal Bank of Scotland, Standard Chartered Bank, and SBI Capital Markets
Timing: As early as today
Netroadshow Details: http://www.netroadshow.com; Access code: Tata2013 (not case sensitive)

[stl67]

I applied for 1 lot, got 0. Apparently price is now in region of 102.25 at DBS.

i applied 5 and got zero sianzzz

[starrynight]

For records:
a. bond size: $125m
b. orders: $2.1b(!!)

Any views? Looks interesting?

Issuer:
Courts Asia Limited
Status:
Senior, unsecured
Issue rating:
Unrated
Initial Guidance:
4.75% - 5.5%, semi-annual, ACT/365 (Fixed)
Tenor:
3 Year
Issue Size:
TBA
Issue Date:
23 April 2013
Maturity Date:
23 April 2020
Issue Price:
100%
Details:
SGD250K / Singapore Law / CDP
Joint Bookrunner:
DBS (B&D) / HSBC
Timing:
As early as today's business

[starrynight]

Just realised the issue was only $125m!

Spoke to a friend at HSBC - there was a 0.25% discount given to the banks, so some PB customers basically paid 0 commission.

U using DBS?

i applied 5 and got zero sianzzz

[stl67]

The game is too complicated to me.....
BTW, where can I get market info on FCN issued by banks, look like this is a good source to read the market...

thanks in adv

This contract I got about 1.5 mths ago from my stand chart banker. I bought 600k contracts. Observation date is every month and hopefully will not get KO.

Underlying1Underlying2CurrencyTenorCall/Cpn ScheduleFinal Fixing DateFixed Coupon PeriodsKI TypeKI StrikePut StrikeKO TypeKO BarrierCoupon (p.a.)System Remarks2828 HK2823 HKSGD6mMonthly02-10-13All PeriodsDaily85.00%100.00%Period End100.00%10.00%Indicative Price

[Laguna]

i applied 5 and got zero sianzzz

you should check with your banker as to whether they are the book runners. If not, forget about it.

If they are the book runners, how good is your relationship with them? ie, what is your AUM with them.

Next is the szie of the issue and the quality...

and then, you decide whether you will sian or not

[Laguna]

System Remarks2828 HK2823

ya, IMO, they gave you good recommendation but I think, wrong timing.

[starrynight]

Just got below email. This one looks like will have good response too.

Issuer:
Parkson Retail Group Limited
Status:
Fixed Rate, Senior Unsecured Notes
Format:
Reg S
Expected Issue rating:
Ba1 (Moody’s), BBB- (Fitch)
Initial Guidance:
5% area
Tenor:
5 Year
Issue Size:
US$ Benchmark
Issue Date:
TBA
Maturity Date:
TBA
Issue Price:
TBA
Key Covenants:
Fixed Charge Coverage Ratio of 2.5x, Limitation on Restricted Payments, negative pledge, Limitation on Business
Use of Proceeds:
Refinancing of existing indebtedness and for general corporate purposes
Details:
SEHK listing, US$200k/US$1k denoms, English Law
Joint Bookrunner:
DBS Bank Ltd., J.P. Morgan, Nomura (B&D)
Timing:
As early as today's business

[stl67]

This contract I got about 1.5 mths ago from my stand chart banker. I bought 600k contracts. Observation date is every month and hopefully will not get KO.

Underlying1Underlying2CurrencyTenorCall/Cpn ScheduleFinal Fixing DateFixed Coupon PeriodsKI TypeKI StrikePut StrikeKO TypeKO BarrierCoupon (p.a.)System Remarks2828 HK2823 HKSGD6mMonthly02-10-13All PeriodsDaily85.00%100.00%Period End100.00%10.00%Indicative Price

Retype cause the copy and paste screw up
KICKIN level 85%
Strike 100%
Callable monthly at 100%
Coupon 10%

[stl67]

Just realised the issue was only $125m!

Spoke to a friend at HSBC - there was a 0.25% discount given to the banks, so some PB customers basically paid 0 commission.

U using DBS?

3 from uob and 2 from ubs. somemore when they call me I agree on the spot. But like Laguna said, the book runners play a part.

[cbsh38584]

Retype cause the copy and paste screw up
KICKIN level 85%
Strike 100%
Callable monthly at 100%
Coupon 10%

It dont feel comfortable doing FCN with 100% strike level. HK2828 & 2823 should be fine to hold even if it get convert to either one of the stock.

rdgs,
Vic

[Laguna]

How not to love this thread

[stl67]

It dont feel comfortable doing FCN with 100% strike level. HK2828 & 2823 should be fine to hold even if it get convert to either one of the stock.

rdgs,
Vic

master sifu (my kids love KungFu panda), with your words I can sleep even better. Actually, i very free and have been studying the underying of the 2 ETFS. The more I monitor, the more I am convinced that I will be KO very soon which I dont want.

[cbsh38584]

Bought Citi pacific (doing steel) perp bond (US$200k - LTV 60%) coupon 7.785% @98 on Mar12. Just sold my Citi pacfic Perp bond @ 99. Slowly reducing my Perp bond holding.

rdgs,
Vic

[cbsh38584]

master sifu (my kids love KungFu panda), with your words I can sleep even better. Actually, i very free and have been studying the underying of the 2 ETFS. The more I monitor, the more I am convinced that I will be KO very soon which I dont want.

We are here to learn. I learn faster by sharing what I know. I dont learn fast if I dont share what I know. While I writing, my brain is working & I am learning.

rdgs,
Vic

[starrynight]

If you don't mind saying, how much comm do you pay for your trades? Just for info. Thanks

Bought Citi pacific (doing steel) perp bond (US$200k - LTV 60%) coupon 7.785% @98 on Mar12. Just sold my Citi pacfic Perp bond @ 99. Slowly reducing my Perp bond holding.

rdgs,
Vic

[cbsh38584]

If you don't mind saying, how much comm do you pay for your trades? Just for info. Thanks

My banker says is 0.2. But I cant verify as I cant see the actual buy/sell price.

rdgs,
Vic

[starrynight]

Thanks! I'm not on the PB platform, but from what I hear from 2 friends in the industry:
a. 0.25% is what mass affluent platform clients pay. Staff can get 0.20%
b. 0.20% is more or less that PB clients pay. That said, a number of PB clients are less price sensitive, and pay the standard 0.40% that the bank quotes.

0.25% discount from issuer to bank seems quite common now.

Banker friend also said that the PB side needs around 0.25 / 0.30% to break even.

My banker says is 0.2. But I cant verify as I cant see the actual buy/sell price.

rdgs,
Vic

[cbsh38584]

Thanks! I'm not on the PB platform, but from what I hear from 2 friends in the industry:
a. 0.25% is what mass affluent platform clients pay. Staff can get 0.20%
b. 0.20% is more or less that PB clients pay. That said, a number of PB clients are less price sensitive, and pay the standard 0.40% that the bank quotes.

0.25% discount from issuer to bank seems quite common now.

Banker friend also said that the PB side needs around 0.25 / 0.30% to break even.

I dont trust the bond dealer pricing. My friend wants to sell the OLAM bond at "A" bank in 2011. "A" quote 102 to sell. Check with another bank within minutes, the sell price is 103. 1% is S$2500.

I always try to check for a 2nd buy/sell pricing from another bank. The 0.2 or 0.25 or 0.4 comm can be manipulated as we really can see the actual live price.

rdgs,
Vic

[Laguna]

In the Bloomberg station, you can see so many quotes for the same product at different bids and offers

[cbsh38584]

S$ Cheung Kong perpetual bond or long date good quality bond like Keppel corp can be your retirement life plan ?

If a person age 60 who has S$250k (no leverage) . Is he better off buying Annity plan which the return is less than 3% or buying a good quality Perp or straight bond yield 5% ?

Sing dollar Cheung Kong Perp bond (callable 2016) coupon 5% @100. You will rec S$12.5/yr till 2016. If it is not call back. You shall continue to rec S$12.5/yr perpetually until the next call date.

As for keppel corp long date bond Coupon 4%, 2042, U need to wait for it to correct to a attractive level b4 to yield>5%.

There are so many good quality SG Perp & straight bond in the mkt. We need to be patient for correction to come.

http://tradehaven.files.wordpress.co...orp-weekly.jpg

It may not be a good idea to buy a children education or endowment fund as the return is less than 3%. Is buying a good quality long date bond to prepare the lump sum for your children university education ? Again, we need to the correct to come to get a attractive return.

I am still searching for a better return either for my retirement plan or my children education plan.


rdgs,
Vic

[Rosy]

Many buy endowment plan and treat it as a forced savings and they do not have a large sum of capital to begin with.

Different stroke for different folks.

What i do not like about corporate bonds personally is due to min 250k. Can hardly diversify into several bonds. It is more suitable for investors with PB status.

[Rosy]

If a person at age of 60 with 250k spare cash, i would suggest to put the money in various good dividend blue chips instead. (And/or some bond funds)

[Iamderek]

Below comments from 1 of my 3 Bankers. This banker's knowledge on bond is solid, I mean good enough for me. Honestly, I am quite prepare to take the risk after seeing the comments since this compnay is profitable, a local company but -ve point is over leverage. However, another banker "shot" down my greed and advice me to reconsider.
So ok lah, better dont touch and leave it alone, unless it starts to trade below par.

"Umm Swiber is not a recommended bond and the drawback is that there is no lending value on the bond.

However, these may be positives:

Swiber achieved record-high revenue of US$952.2M and net profit US$62.2M for FY2012, the highest since its listing in 20

Swiber continues to secure sizable contracts with orderbook of approximately US$1.35bn as of Feb 2013

The swiber 6.25% due 2015 trades around 6.08% YTM. Generally, Swiber issues at high 5% to 6plus % area."






BTW, does anyone know if we can buy some pricing tool like Murex. Can we buy Murex module?

I would avoid Swiber unless it is trading below par. In fact I have advised clients who bought the IPO maturing in 2015 to cash out.

[Iamderek]

In the end all of these money printing will fail to revive all of their economies. Sg will get what she wishes, which is a global financial center, because of sg transparency and rules of law.

In the end sg properties will shoot up even more.

Rule of law is only as valid as our military might and diplomatic reserves.

Pray that the bankrupted nations do not hunt us for our wealth.

[Iamderek]

When U use equity loan to buy STRAIGHT bond. I am believe U know what are thing bond to buy.

1. straight quality bond only.

2. Short dated bond.

3. Bond issue size too small is not advisable. Sometime no buyer/seller.
At least >US$300m to be safe. US$500m will be better.

4. If u want to be extra safe , buy only senior secured bond but yield will be low.

5. Your equity loan if possible fixed it two or three years. if Floating rate, U need to know the sudden increase in rate.

6. If must know the margin call trigger level if an unexpected event happen. Like a bomb explosion at SMRT by terriorist. U must be mentally prepared for this.

Your banker should be able to advise U more. Start small 1st if U are not sure. U need to pay school fee to learn. Dont pay VERY BIG FEE.


I married late & hv 2 young children. Very stressful helping to take care. less time to go out with my friends again. If I am single, I will be very aggressive in doing ACCUMULATOR product myself again. Now cannot. Got to think of my family. This is one of the reason why I go for bond in 2010/2012 by leveraging. It is much less risky than ACCUMULATORs.So far my profit from bond is >S$100k as from Apr.But will slowly reduce my bond holding by 2013 as 2014/2015 is quite risky for bond.

rdgs,
Vic

On the contrary, do consider the possibility that interests will never climb again for the foreseeable future. All the jawboning by the Federal Reserve is just that - jawboning.

[Iamderek]

This was launched in early NOV 2012 from UBS.

ATTRACTIVE AUTOCALL COUPON + DEEP KNOCK IN + CONVERSION
ABX,Barrick Gold (Spot US$36)+ FCX,Freeport Mcmoran (US$39.5)

Tenure 1 year
Interest : 22% pa
Knock Out: 100% i.e ABX=US$36 FCX=US$39.5

Knock in level 62% i.e ABX = US$22.3 FCX = US$24.5

Strike level : 95% i.e ABX=US$34.2 or FCX=US$37.5


Looking at the FCN on ABX & FCX stock deep Knock- in level of 62% and a extremely attractive 22%pa (US$100k investment mean US$22k return per year).

U can observe that this two counter ABX+FCX will likely to drop in the next few mths or the commodities sector may not be doing well in the next few mths. U will likely to avoid commodities sector or take profit on it after UBS come out with this FCN on ABX+FCX on early Nov 2012. Today (5 mths later) , ABX is US$26.6 (25% drop). FCX is US$32.5 (18% drop). Still hv 7 mths to go. I think ABX will drop more since it is more into GOLD. Let see whether those investor will get their 22% (US$22k from US$100k investment) or the share at US$34.2 or US$37.5 (the worst performing stk).


I always want my banker to continue to let me know all FCN or ELN which they hv launched in the open mkt. Sometimes, the deep strike + extremely attractive return 22% from the FCN will enable U to know the stk or sector performance in the next few mths.

I save & record all the FCN + ELN from all my bankers send to me into my excel file to learn the dirty trick from the issuers.

rdgs,
Vic

Here is a little secret:

Whatever the bank's equity derivatives desk recommends to us bankers for our clients, I never take those recommendations.

They need to offload their holdings to someone - in this case, you.

I have always planned my ELN trades for my clients independently of their recommendations.

Just for sharing: Client A has a strike price on Barrick Gold done yesterday at $18.50. Knock out at $19.50.

[Iamderek]

So there is a real risk of doing FCN. I am surprise that FCN/ELN risk level is 5 (10 the highest risk) given by the bank. Those who did ELN/FCN on Suntech solar the capital is going to drop as much as 90%. Even Japan Tokyo electric which consider very safe is also not spared. The price was >JPY 3000. After the nuclear incident. Price is now JPY333.

Do FCN/ELN, I am always worry more on natural disaster which we cant predict. I prefer to do at E-trade platform which allow U to start as min as US$3k. U cant cut loss or take profit as & when U like. Not from the bank.

rdgs,
Vic

This is because most bankers know jack about support and resistance levels, market sentiment, candlestick charting, the difference between simple moving average and exponential moving average, et cetera.