Important Events
- On Monday, the People’s Bank of China, announced that it has kept the 1 year and 5 year Loan Prime Rates unchanged at 3.70% and 4.60% respectively.
- On
Wednesday, the Monetary Authority of Singapore (“MAS”) released its Consumer
Price Developments for the month of February. MAS Core Inflation reduced to
2.2% year-on-year (“y-o-y”) in February 2022 as compared to 2.4% in January
2022. This was due to lower inflation for services, food and electricity &
gas. Consumer price index for all items rose to 4.3% y-o-y due to higher
private transport inflation. Inflation on car prices for February was 17.2%
y-o-y as compared to 14.0% y-o-y in January.
MAS stated that global inflation is expected to stay elevated for the first half of 2022 and is expected to ease in the second half of the year. Geopolitical risks have caused crude oil prices to elevate. According to MAS’ estimates, Core Inflation is forecasted to increase further in the near term and could reach 3% in the middle of the year before easing towards the year end. For 2022, MAS’ estimates Core Inflation to average between 2-3% while CPI-All Items to be between 2.5% to 3.5%.
Asian High Yield Bond Index
- The Barclays USD Asia High Yield Bond Index decreased 2.1% for the week ended 25 March 2022.
- On Monday, Sunac China announced the profit attributable to owners and the core net profit for the year ended 31 December 2021 is expected to decrease by 85% and 50% respectively. They were mainly because the investment loss of the stocks of BEKE, the decrease in sales revenue and gross profit margin, and the increase in amount of provision for the losses on inventories and receivables.
- On Tuesday, China Evergrande held its second investor call for its offshore investors. Evergrande was represented by Executive Director Siu Shawn, Non-Executive Director Liang Senlin, and Member of Risk Management Committee Chen Yong in the investor call. The Group provided more information on its restructuring plans and responded to investors’ questions and concerns. Investors may read our summary and our comments of the investor call here.
- On Wednesday, Yuexiu Property received the approval from the China Securities Regulatory Commission to issue RMB bonds with a total principal amount of up to RMB9.85 billion through its subsidiary Guangzhou City Construction & Development.
- On Wednesday, LVGEM (China) announced the unaudited consolidated profit attributable to the owners for the year ended 31 December 2021 is expected decrease by around 70%. It was mainly because the absence of revaluation gain from Baishizhou Urban Renewal Project, decrease in revenue from sales of properties, and increase in finance costs.
Interest Rates and Currencies
- The US dollar appreciated against the Singapore dollar last week with the USD/SGD currency pair ending at 1.3581. The 2-year SGD Swap Offer Rate (“SOR”) increased by 30 basis points (“bps”) to 1.9550 while the 10-year SGD SOR increased by 20 bps for the week to 2.4450%. Both the 5-year SOR and the 5-year SORA-OIS increased by 26 bps and 24 bps to 2.3500% and 2.0700% respectively.
- Last week, the yield of 2-year US Treasuries (“UST”) and the 10-year UST increased 33 bps and 32 bps to 2.2696% and 2.4731% respectively.
Corporate Updates and New Issues
- On Tuesday, AIMS APAC REIT announced that the proposed acquisition at
315 Alexandra Road remains subjected to the approval of JTC Corporation and AIMS
APAC REIT and the related parties have agreed to extend the target date for the
receipt of approval of JTC Corporation to 27 April 2022.
AIMS APAC REIT also announced the redemption of its outstanding SGD 50m of AAREIT 3.600% 22Mar2022 Corp (SGD) on Tuesday.
- On Tuesday, Tuan Sing Holdings Limited announced that the company will be developing an outlet mall in Indonesia together with Mitsubishi Estate. The outlet mall will be called The Grand Outlet – East Jarkata, at a total cost of approximately SGD 90m. Construction is expected to commence in 2Q 2022 and expected to be completed in 4Q 2023.
- On Wednesday, Hotel Properties Limited announced that the company is intending to issue a new 5 year SGD senior unsecured bond at an initial price guidance of 4.30%. Proceeds from the new issue will be used for the refinancing of existing borrowings, including the redemption of HPLSP 4.650% Perpetual Corp (SGD), as well as financing working capital requirements. The final price guidance of the new issue was 4.20% and investors who are interested in this new issue may read our views on the new issue here.
- On Wednesday, Singapore Post Limited announced a new issue of a 5 year senior unsecured bond with an initial price guidance of 3.45%. The Group currently has a credit rating of ‘BBB+’ (stable) by S&P. The new issue, however, is expected to be unrated. Proceeds from this bond offering will be used for general corporate purposes including refinancing of existing borrowings. The new bond has a make-whole call provision, where the issuer can choose to redeem the bond early in whole or in part. It may also be redeemed for taxation reasons at the option of the issuer, in whole but not in part, at 100. The final price guidance of the new issue was 3.23% and investors who are interested in this new issue may read our views here.
- On Wednesday, CapitaLand Investment’s wholly-owned subsidiary, The
Ascott Limited, announced that it has acquired two properties in Ningbo and
Amsterdam for approximately SGD 190m through its Ascott Serviced Residence
Global Fund (“ASRGF”). The ASRGF is Ascott’s private equity fund with Qatar
Investment Authority and when fully deployed, the acquisitions will boost
Ascott’s total funds under management to SGD 9b.
In Nongbo, Ascott acquired two residential towers and the project will be named as the Somerset Hangzhou Bay Ningbo and expected to be completed in 2025 while the acquisition in Amsterdam will be completed in 2023 as the Citadines Canal Amsterdam.
- On Wednesday, Sembcorp Marine Limited announced that its wholly-owned subsidiary, Sembcorp Marine Rigs & Floaters Pte Ltd has secured a contracts for the construction of a Wind Turbine Installation Vessel (“WTIV”). The project is expected to be completed in early 2025 and the construction of the WTIV will be based on Sembcorp Marine’s in-house design.
- On Thursday, Singapore Press Holdings Limited (“SPH”) announced a
tender and consent solicitation exercise (“CSE”) for its SGD 500m SPHSP 3.200% 22Jan2030 Corp (SGD). SPH invites noteholders to vote and approve to waive:
(a) any potential non-compliance with Clauses 7.2, 15.9 and 16.31 of the Trust Deed and Conditions 4(b), 10(b) and 10(c) of the Notes;
(b) the occurrence of any Event(s) of Default under Condition 10 of the Notes which has occurred or may occur as a result of any potential non-compliance with Clauses 7.2, 15.9 and 16.31 of the Trust Deed and Conditions 4(b), 10(b) and 10(c) of the Notes
(c) any breach of any requirement, covenant and term in the Trust Deed and the Notes which has occurred or may occur in connection with any potential non-compliance with Clauses 7.2, 15.9 and 16.31 of the Trust Deed and Conditions 4(b), 10(b) and 10(c) of the Notes.
SPH also wishes to approve the inclusion of an Early Redemption Option of the Issuer condition whereby the Issuer may, by giving not less than 10 business days’ notice to the Trustee, the Issuing and Paying Agent and the Noteholders, to redeem all of the Notes at 100 per cent. SPH have stated that should the Extraordinary Resolution be passed, the Company intends to exercise the Call Option so that all outstanding Notes will be redeemed within 10 business days after the Settlement Date.
In addition to the CSE, SPH also invited Noteholder to sell for cash at a purchase price of 100.75 per cent of the principle amount of the Notes. The Early Consent Fee for the CSE will be 0.25 per cent while the Normal Consent Fee will be 0.15 per cent. The deadline for the Early Consent Fee will be on 7 April 2022, 5pm while the deadline for the CSE will be on 18 April 2022, 2pm. Noteholders who wish to read more on the CSE and tender offer may refer to SPH’s SGX announcement here.
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