Important Events
- On
Thursday, the ECB released their account of the monetary policy meeting held on
13 & 14 April 2022. Regarding developments within the financial market, Ms
Isabel Schnabel noted that investor risk sentiment had improved considerably since
the previous Governing Council’s meeting in March 2022. Equity prices in the
Euro moved towards levels prior to the Ukraine war, sovereign spreads had
narrowed, and risk-free yields have increased significantly. With regards to
the Governing Council’s discussion on Europe’s economy, members agreed that the
war in Ukraine affected not only Europe but globally. The Ukraine war and the
surge in Covid-19 infections in China have clouded the global economic outlook.
The members agreed that monetary policy should gradually normalise and had to be adjusted to the medium-term inflation outlook. However, some members also noted that given the higher than expected inflation figure, net asset purchases should be ended as quickly as possible so as to allow the possibility for a first interest rate hike as soon as possible.
Asian High Yield Bond Index
- The Barclays USD Asia High Yield Bond Index decreased by 1.4% for the week ended 20 May 2022.
- On Wednesday, Zhongliang Holdings announced that the Group has completed the exchange offer and consent solicitation of two USD bonds, and expected they will not repay the accrued interests and principals of the remaining part.
- On Thursday, Fantansia Holdings announced that they sold its 51% stake of the project company, called CCCG Huachuang (Shaoxing) Real Estate, to CCCG Meilu (Hangzhou) Real Estate Company, for the transaction price of RMB 760.6 million.
- On Friday, Agile Group announced that on 20 May 2022, they have fully repaid the outstanding HKD loan of HKD 3.34 billion and the outstanding USD loan of USD 60 million.
Interest Rates and Currencies
- The US dollar depreciated against the Singapore dollar last week with the USD/SGD currency pair ending at 1.3804. The 2-year SGD Swap Offer Rate (“SOR”) increased by 14 basis points (“bps”) to 2.51 while the 10-year SGD SOR remained flat for the week at 2.81%. Both the 5-year SOR and the 5-year SORA-OIS increased by 2 bps to 2.7100% and 2.4325% respectively.
- Last week, the yield of 2-year US Treasuries (“UST”) remained flat at 2.5807% while the 10-year UST fell by 15 bps to 2.7811%.
Corporate Updates and New Issues
- On Tuesday, Singapore Airlines (“SIA”) released the group’s operating results for April 2022. SIA’s operating results improved significantly mainly due to the easing of travel restrictions in Singapore as well as other key markets of SIA. SIA and Scoot carried a total of 1,452,500 passengers in April 2022, an improvement of 62.7% month-on-month (“MoM”). The Group’s passenger capacity increased by 6%, reaching 57% of pre-Covid levels. In April, SIA resumed operations to Davao and Cebu while Scoot resumed services to Hat Yai and Kota Kinabalu. As of April 2022, the Group’s passenger network covered a total of 95 destinations.
- On Wednesday, Azalea Asset Management announced that the company is planning to issue a new series of Astrea bonds - Astrea 7. The new offering will have 3 classes – A-1, A-2 and B with an indicative total size of USD 755m. The class A-1 will be denominated in SGD while the class A-2 and B will be denominated in USD. Unlike other years, where usually only the class A-1 bonds were offered to retail investors, this year, the class B bonds are also available to retail investors. The final price guidance of the bonds were 4.125% for class A-1, 5.35% for class A-2 and 6.0% for class B. Investors who are interested may read our new issue views here.
- On Wednesday, First REIT announced that Primerich Investments Pte. Ltd. and Surabaya Hospitals Investment Pte. Ltd. (both of which are direct wholly-owned subsidiaries of Perpetual (Asia) Limited, the trustee of First REIT) entered into a conditional sale and purchase agreement with PT Siloam International Hospitals Tbk (“Siloam”) and PT Megapratama Karya Bersama. The sale and purchase agreement is for the proposed divestment of 100% of the issued and paid-up share capital of PT Tata Prima Indah (“PT TPI”) for a divestment consideration of IDR 430b (~SGD 40.9m). Siloam Hospitals Surabaya is 100% owned by PT TPI. The use of divestment proceeds will provide First REIT to optimise its capital structure and the net proceeds may be used to repay debt, finance any capital expenditure and/or general corporate and working requirements and to distribute as capital gains.
- On Friday, Aspial Corporation Limited (“Aspial”) and Aspial Treasury
Pte. Ltd. (“ATPL”) wishes to announce that a resolution in writing has been
signed by or on behalf of the holders of the 6% 1Jul2022 bonds (ISIN: SGXF22368025)
to extend the maturity date of the 6% bonds by two years from 1 July 2022 to 1
July 2024. Additionally, ATPL and ACL also invited bondholders who did not sign
the Resulution in Writing to offer to sell their outstanding 6% 2022 bonds back
to ATPL at par on the original maturity date of 1 July 2022.
Noteholders who do not offer to sell their outstanding 6% 2022 bonds will have their maturity extended to 2024. Eligible noteholders who are interested in tendering may contact ATPL at ATPL at felix_lim@aspial.com and +65 6840 7790 no later than 30 May 2022.
- On Friday, the liquidators of Ezion Holdings Limited updated that the liquidators have applied to the SGX-ST for the company to be delisted having regard that the company is insolvent and the company’s debts far exceed its realisable assets. According to the liquidators, potential investors were sourced prior to the liquidation and there were no suitable restructuring proposals by any potential investor. The liquidators have also stated that the company is not in a position to make any distribution to shareholders or make an exit offer to shareholders.
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