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Saturday, 8 October 2016

Singapore Bonds - Like Dominoes, they are starting to fall




In late 2015, Trikomsel and Pacific Andes Resources Development failed to make payments on three notes. 

Like dominoes, other companies in the Oil and Gas sector are starting to fall:

1.  Swiber
 Defaulted on outstanding bonds for semi-annual payment in the $150 million series 001 Trust Certificates, which carry a coupon rate of 6.5 per cent and are due for maturity in August 2018. Legal claims against Swiber have been piling up, rising to US$231.4 million as of 15 Sep 2016. Swiber's application for judicial management was approved by the High Court on 6 October 2016.

2,  Rickmers Maritime
Asking creditors for leniency on about US$253 million (S$344.8 million) of debt.   It won’t be able to repay US$179.7 million of bonds due in March 2017 and the interest and principal on S$100 million of notes due in May 2017.    An extraordinary general meeting (EGM) on 31 Oct 2016 will be held to seek approval for a debt-to-equity proposal, which is highly unpopular among bondholders.

3.  Perisai Petroleum Teknologi
 Perisai Petroleum Teknologi - Ezra Holdings’ associate company Perisai Petroleum Teknologi was unable to win the 75 per cent note-holder approval needed to restructure its S$125mil (RM377mil) medium-term notes (MTN).  An indicative offer of financing from a financial institution has been received, following the rejection of Perisai’s initial restructuring plan by bondholders for its MTN.

4.   Swissco Holdings 
Swissco – Provided the market with a nasty surprise by proposing to restructure its bonds worth US$100 million including a S$2.85 million coupon payment due on 6 Oct 2016.   Firm’s cash flow situation could be worse than expected.

For Swissco, it was not so long ago (less than 3 months in fact!), when they came out to imply that there were different from Swiber, when the latter announced that they planned to go into voluntary liquidation.   In fact, they even issued a press release to say that they were in a different sub-sector.     See attached. 






















 One really wonders how much we can trust our companies….   : (




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