Hyflux 6% CPS Last:65.37 -

Hyflux 6% CPS 10

Luckily sold this at 99.9 last month when result was out. It' s dropping so fast now. Quite rare for a bond to drop so much in a few days esp when Dividend is going to be due soon.
Wonder if Hyflux will be redeeming this perpetual bond in April 2018.

Hi, is there any official announcement that Hyflux shall redeem the CPS in Apr 18.

DIV in OCT 2017 and APR 2017 (call)

Going to be called in apr 2018, now yield at 8% ..worth keeping till it is called.

3 main reasons,
- when the CPS were issued in 2011, Hyflux' s market cap was significantly larger and more profitable.
- given the same risk profile, a debenture from the same company with shorter date to maturity will command a smaller premium as it gets closer to maturity or first-redemption rate.
- Market interest rates are higher now. SOR is now 1% vs negative 2-3 years ago.

vivivava ( Date: 21-Jul-2017 16:28) Posted:

I rem this counter was 104/106 a while ago...then 92/93 recently. Must have credit issues or fear creeping to drop below 100

6% ...seems like very good return at this price if no credit issues

Hyflux is not profitable but they are super cash-rich. They might have to realize some losses for Tuaspring but they will be even more cash rich when the proposed 70% disposal goes through.

So, they can' t wait to redeem to lessen their interests burden.

vivivava ( Date: 21-Jul-2017 16:00) Posted:

any furthur insight on this counter. seems like it close to 100 nw, no credit issue now?

sun233 ( Date: 09-Dec-2016 07:53) Posted:

EXCERPT FROM BUSINESS TIMES TODAY..........

O& M lessons for investors in high-yield perpetuals

Important to understand and be comfortable with the numbers before taking the plunge

DEBT-laden offshore and marine (O& M) companies that issued high-yield bonds have recently garnered unwanted attention. Less than half a year after offshore engineering firm Swiber Holdings went into judicial management, offshore vessel owner Swissco Holdings said in November that it would suffer the same fate after its lenders rejected debt restructuring proposals, from both the firm and an unnamed Chinese investor. Swissco and its subsidiary Swissco Offshore (Pte) Ltd have since filed for judicial management.

Other companies in the sector have also already defaulted on interest payments and appear to be teetering on the brink, with not much except the continued benevolence of their bankers to avert a collapse. It is probably safe to assume that when investors put money into those O& M corporate bonds, they likely did not consider such an outcome - or could have mentally assigned it the same odds that most polls had given Donald Trump - now United States President-elect - on the eve of the presidential election.

With those debt defaults in mind, it might probably be a good time for investors in recently issued high-yield perpetual securities to re-evaluate the possible worst-case scenarios for those investments.

One example that may be interesting to look at is water-treatment firm Hyflux, which issued a retail offering of perpetual bonds in May 2016 with a coupon rate of 6 per cent. Unlike plain vanilla bonds, perpetuals are hybrid bonds with no fixed maturity that may allow coupon payments to be deferred. Hyflux raised S$500 million from selling perpetuals in May, a larger amount than its then market value of S$440 million. The group' s market value has since fallen to about S$380 million.

When it launched its perpetuals offering this year, it said a major part of the proceeds would be used to repay S$100 million of its outstanding notes due this year that it had issued under a S$1.5 billion multi-currency debt issuance programme as well as S$175 million in perpetual securities. It had sold S$175 million of perpetual securities in 2014 at 4.8 per cent, callable in 2016. Hyflux' s perpetuals traded at 89.8 Singapore cents as at Dec 8.

From an earnings growth standpoint, Hyflux does not show a clear downward pattern. Net profit fell in 2013, rose in 2014, then fell again in 2015. But its free cash flow trend presents a different picture. The flow was negative every quarter except one since the start of 2012, according to data from financial research website YCharts. Though negative free cash flow can indicate that a company has been making substantial capital expenditures that may pay off in future, it can also be a sign the company is burning more cash than it can collect.

Hyflux has substantial net debt over equity. Its net gearing ratio was 0.56 as at end-2012, ballooned to 1.15 at end-2013, shrank back down to 0.51 at end-2014 and rose to 0.85 at end-2015. That was nowhere near as high as Swiber' s, which had net gearing of 1.59 as at end-2015 and 1.57 as at end-March this year before it collapsed. Swissco, however, had a net gearing of 0.78 as at June 30 this year. Observers have also pointed out that the 6 per cent coupon for Hyflux' s perpetuals is above its most recent figures for return on equity (ROE), which gauges how well a frim can generate profit from its shareholders' investments.

The group' s ROE was 7.1 per cent in 2012, but that dropped to 5.0 per cent in 2013, slid further to 4.3 per cent in 2014 and was even lower at 3.2 per cent for 2015, as shown by the financial history on its website. The figures were based on equity figures that included its cumulative preference shares and perpetual capital securities. The 2015 ROE was significantly lower than the 6 per cent coupon on its perpetuals.

Of course, the combination of heavy debt and negative free cash flow does not mean a company will go the way of Swiber and Swissco. Hyflux is also in a completely different industry.

Perhaps less calamitously, Swiber' s and Swissco' s bond investors mostly appear to be private banks' customers, who probably are well-heeled, sophisticated and less likely to lose all their savings if those companies default. Some may argue that high-yield perpetuals ought not to be offered to mom-and-pop investors at all.

But for savvy retail investors who have considered Hyflux' s financials before buying the perpetuals and are comfortable with the risk, high-yield perpetuals still offer the chance for them to make well-informed bets with potentially handsome rewards, and there is no reason to take away that option from them. For the rest, it is at least not too late to take another look at the numbers to make sure they are comfortable with them.

any furthur insight on this counter. seems like it close to 100 nw, no credit issue now?

sun233 ( Date: 09-Dec-2016 07:53) Posted:

EXCERPT FROM BUSINESS TIMES TODAY..........

O& M lessons for investors in high-yield perpetuals

Important to understand and be comfortable with the numbers before taking the plunge

DEBT-laden offshore and marine (O& M) companies that issued high-yield bonds have recently garnered unwanted attention. Less than half a year after offshore engineering firm Swiber Holdings went into judicial management, offshore vessel owner Swissco Holdings said in November that it would suffer the same fate after its lenders rejected debt restructuring proposals, from both the firm and an unnamed Chinese investor. Swissco and its subsidiary Swissco Offshore (Pte) Ltd have since filed for judicial management.

Other companies in the sector have also already defaulted on interest payments and appear to be teetering on the brink, with not much except the continued benevolence of their bankers to avert a collapse. It is probably safe to assume that when investors put money into those O& M corporate bonds, they likely did not consider such an outcome - or could have mentally assigned it the same odds that most polls had given Donald Trump - now United States President-elect - on the eve of the presidential election.

With those debt defaults in mind, it might probably be a good time for investors in recently issued high-yield perpetual securities to re-evaluate the possible worst-case scenarios for those investments.

One example that may be interesting to look at is water-treatment firm Hyflux, which issued a retail offering of perpetual bonds in May 2016 with a coupon rate of 6 per cent. Unlike plain vanilla bonds, perpetuals are hybrid bonds with no fixed maturity that may allow coupon payments to be deferred. Hyflux raised S$500 million from selling perpetuals in May, a larger amount than its then market value of S$440 million. The group' s market value has since fallen to about S$380 million.

When it launched its perpetuals offering this year, it said a major part of the proceeds would be used to repay S$100 million of its outstanding notes due this year that it had issued under a S$1.5 billion multi-currency debt issuance programme as well as S$175 million in perpetual securities. It had sold S$175 million of perpetual securities in 2014 at 4.8 per cent, callable in 2016. Hyflux' s perpetuals traded at 89.8 Singapore cents as at Dec 8.

From an earnings growth standpoint, Hyflux does not show a clear downward pattern. Net profit fell in 2013, rose in 2014, then fell again in 2015. But its free cash flow trend presents a different picture. The flow was negative every quarter except one since the start of 2012, according to data from financial research website YCharts. Though negative free cash flow can indicate that a company has been making substantial capital expenditures that may pay off in future, it can also be a sign the company is burning more cash than it can collect.

Hyflux has substantial net debt over equity. Its net gearing ratio was 0.56 as at end-2012, ballooned to 1.15 at end-2013, shrank back down to 0.51 at end-2014 and rose to 0.85 at end-2015. That was nowhere near as high as Swiber' s, which had net gearing of 1.59 as at end-2015 and 1.57 as at end-March this year before it collapsed. Swissco, however, had a net gearing of 0.78 as at June 30 this year. Observers have also pointed out that the 6 per cent coupon for Hyflux' s perpetuals is above its most recent figures for return on equity (ROE), which gauges how well a frim can generate profit from its shareholders' investments.

The group' s ROE was 7.1 per cent in 2012, but that dropped to 5.0 per cent in 2013, slid further to 4.3 per cent in 2014 and was even lower at 3.2 per cent for 2015, as shown by the financial history on its website. The figures were based on equity figures that included its cumulative preference shares and perpetual capital securities. The 2015 ROE was significantly lower than the 6 per cent coupon on its perpetuals.

Of course, the combination of heavy debt and negative free cash flow does not mean a company will go the way of Swiber and Swissco. Hyflux is also in a completely different industry.

Perhaps less calamitously, Swiber' s and Swissco' s bond investors mostly appear to be private banks' customers, who probably are well-heeled, sophisticated and less likely to lose all their savings if those companies default. Some may argue that high-yield perpetuals ought not to be offered to mom-and-pop investors at all.

But for savvy retail investors who have considered Hyflux' s financials before buying the perpetuals and are comfortable with the risk, high-yield perpetuals still offer the chance for them to make well-informed bets with potentially handsome rewards, and there is no reason to take away that option from them. For the rest, it is at least not too late to take another look at the numbers to make sure they are comfortable with them.

Dividend in yesterday.

Yes, it was $95. The price went down to $92 in Dec 2016.

Just4win ( Date: 24-Mar-2017 14:53) Posted:

I am not sure exactly when u got yours at below $95 ( u mean $95 right ?).. but if this was last year Aug, then the ylded rate is about 7.63%.

Current price is better.. 8.2%, even with commission thrown in.

stlimst ( Date: 24-Mar-2017 14:46) Posted:

Yes, i have bought a fair bit below $9.50.

Really don' t understand why peoplemare selling below $100...unless you are in desparate need to liquidate.

Extremely good returns.

yes. about there including brokage fees, etc.

Just4win ( Date: 24-Mar-2017 14:33) Posted:

Effectively about 8% pa , consider you will get total 9% for 13 months, assuming if this is redeemed by apr 18

ehclim ( Date: 24-Mar-2017 13:17) Posted:

3% only. They pay half yearly but total you get 9% if they call in next April. Good returns.

Thanks for sharing, Pinky. Much appreciated.

pinkowl ( Date: 24-Mar-2017 15:03) Posted:

I have both for diversification. Perennial' s book is better. Lesser risk...property and strong backings.

Just4win ( Date: 24-Mar-2017 14:55) Posted:

Yes, Pinky, this is also in my watchlist. But hyflux is still better

, yield wise. Also prefer hyflux to the other one.

Water is precious

I have both for diversification. Perennial' s book is better. Lesser risk...property and strong backings.

Just4win ( Date: 24-Mar-2017 14:55) Posted:

Yes, Pinky, this is also in my watchlist. But hyflux is still better

, yield wise. Also prefer hyflux to the other one.

Water is precious

pinkowl ( Date: 24-Mar-2017 14:48) Posted:

You can also look at Perennial 4.65%. Redemption in Oct 2018. XD in April too.

Yes, Pinky, this is also in my watchlist. But hyflux is still better

, yield wise. Also prefer hyflux to the other one.

Water is precious

pinkowl ( Date: 24-Mar-2017 14:48) Posted:

You can also look at Perennial 4.65%. Redemption in Oct 2018. XD in April too.

Just4win ( Date: 24-Mar-2017 14:41) Posted: