Posts Tagged ‘junk bonds’

Robin Hoods? Our private bankers/Why ministers may need a pay rise after GE?

In Banks, Energy on 11/05/2015 at 1:24 pm

They make rich S’porean clients poorer, taking from the rich to give to their even richer employers? They are really the “Princes of Thieves”, better than “Robin Hood “Prince of Thieves”.

Remember these bond deals pay good commissions to the private banks (and their private bankers): they get fees from their clients (for giving them access to these now toxic products), and the issuing companies (for stuffing their mullets with junk).

Go KPKB to CASE, CAD and the central bank. Hehehe. Wonder if millionaire ministers kannsa burnt? They’ll need a pay increase.

Remember DBS’ Indian FT blowing up its Treasured clients with credit notes? This could be alot worse for the private clients.

Singapore’s richest investors are hoping that “never” means about three years in the bond market.

Holders of perpetual notes with no set maturity face the island’s first redemption options in September, when three companies including oil services firms Ezra Holdings Ltd. and Swiber Holdings Ltd. can choose to repay securities sold in 2012. While Ezra says it plans to pay off the notes and refinance, their yield has surged more than 200 basis points over the last year to 14.2 percent, suggesting it may be costlier to replace them. Swiber faces the same test after saying it plans to redeem its bonds, which have added more than 230 basis points.

Private banks have snapped up the bulk of Singapore’s S$9.5 billion ($7.1 billion) of corporate perpetuals on behalf of wealthy clients, reckoning the companies would repay the notes at their soonest chance rather than incur higher interest rates when a so-called step-up coupon takes effect. While that would offer some compensation if the debt stays alive, any mishaps could shake faith in securities that have funded about 15 percent of the island’s corporate debt over the last four years.

If any issuers choose not to pay in September, “there would be some discomfort among investors when they realize that what they’ve been holding is not necessarily going to be paid off at the time they expected,” said Vishal Goenka, the Singapore-based head of local currency credit trading at Deutsche Bank AG. “There is nothing right or wrong, issuers have already told them from the beginning the option was there, but there would be some confusion.”
Demand for higher returns in Singapore bonds from the city’s swelling private banking industry has brought with it greater risks.

Three out of every 10 notes sold last year are yielding more than 6 percent. Halcyon Agri Corp. went to debtholders last month asking them to waive interest cover requirements before it’s even had to stump up a coupon payment. Bloomberg’s default model shows that VTB Capital SA has an almost 50 percent chance of reneging on its debt.

“The recent swings have been a good wake-up call,” said Vishal Goenka, the Singapore-based head of local currency trading in Asia for Deutsche Bank AG. “Investors need to analyze the credit quality of issuers more thoroughly.”

Junk-rated companies in Singapore must find funds to repay $2.1 billion of debt this year, up from $1.7 billion in 2014 and $1.1 billion in 2013, according to data compiled by Bloomberg. That accounts for 35 percent of all bonds maturing in Singapore in 2015. Wealthy clients of the island’s private banks snapped up 86 percent of the highest-yielding
And then there is the probability of a rise in US rates in September.

Two S’pore buy-outs in trouble?

In Property on 26/07/2012 at 12:44 pm

Buy-out companies are tapping non-traditional funding avenues to overcome difficult IPO and bank loans markets? TPG Capital, which has around US$52bn in assets under management globally, is considering an expensive high-yield bond for precision engineering firm United Test & Assembly Centre. TPG had in June 2011 looked at an S$500m IPO.

KKR, which has around US$62bn in assets under management globally, became the first private equity fund to use a high-yield bond to refinance a buyout loan in Asia when it took out a US$300m  five-year bond for Singapore technology company MMI International, in February this yr. KKR had in March 2011 looked at an IPO exit for MMI worth S$1bn (then US$785.7m).

In April, it spun that it was planning an IPO for MMI worth  raise between US$400m to US$500m. The IPO was expected to take place in the third quarter. More.

Given market conditions, not likely.

MU: Mgt “clarifies”finances but bond investors are sceptical

In Uncategorized on 07/02/2010 at 5:40 am

The CEO  stressed that United’s debts of £500m are a “misconception” because the club has about £140m in cash available, over half of which was generated by Cristiano Ronaldo’s world record £80m transfer from United to Real Madrid last summer.

And he confirmed manager Sir Alex Ferguson can spend all £80m on new players, should he wish to expand the squad.


Err but how come the price of the junk bonds that MU issued recently have collapsed? Days after they were were issued they fell five percentage points.  Buyers are looking at a loss, if they sell.

Previous posts on MU

On Pool


Get every new post delivered to your Inbox.

Join 260 other followers