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The next Lehmen Minibond Saga

Hangover

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#41
Quick comparison:
Noble and Hyflux has similar market cap at this moment but Noble's debt level is 3x that of Hyflux's

Will they be the black swans in local financial market this year?
 

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#43
Extract from the twitter group of the Noble Perpetual Bondholders: https://twitter.com/NoblePerpHolder

"I don't see why perpetual investors will take this deal. As a perpetual, if you are only getting 3.75 cents and seeing maagement pockets being lined, you might as well BURN THE HOUSE DOWN," says Alex Turnbull, managing partner at Keshik Capital.

Hey Noble Group, where are your positive PR bullsh!t spin on how great your restructuring plan? The $40mm that u plan to pay to your Ad-Hoc group is basically a bribe to get them to give your 20% of NewCo worth c$400mm! Noble Stakeholders, time to wake the fk up!
 

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#44
Huge crowd at Hyflux Inovation Centre on tuesday night. some flagged the reputational risk of not calling retail perps at first call date, asked how protracted the wait wld be.

 
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nayr69sg

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#45
How come a business that is supposedly in financial problem can say that they don't have to sell their assets for cheap?

So Hyflux is not under financial difficulty lah. Not yet lah.

If I was a buyer I would wait and not buy Tuaspring until Hyflux become more desperate.
 

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#46
How come a business that is supposedly in financial problem can say that they don't have to sell their assets for cheap?

So Hyflux is not under financial difficulty lah. Not yet lah.

If I was a buyer I would wait and not buy Tuaspring until Hyflux become more desperate.
If Hyflux is willing to pay 8% (step-up coupon) for the preference shares, some banks will gladly extend a bridging loan for them to redeem the preference shares, by pledging the remaining equity of Tuaspring for 8%pa.

The failure to redeem the preference shares is a breach of credibility, which effectively shuts Hyflux out of the banking system. I am not exaggerating. It is very common for utilities companies to get syndicate loan from banks to finance a project, techincally Hyflux has no means to get fair financing for all her future endeavors. If Hyflux wants to stay independent, they will definitely not think about not redeeming the preference shares.

So if this is not a concern to Hyflux. It hints that they have another focus; they are positioning themselves as a takeover target.
Under a new master, Hyflux will obtain easy and cheaper assess to the credit market.

The sales of Tuaspring is a critical issue to the takeover prospects.
  • A foreign buyer wants TuasOne but not Tuaspring.
  • A local buyer does not want Tuaspring (25% of our water supply) falling into foreigners' hands (our water reclaimation and desalination plants are locally owned and operated by PUB).
  • A foreign buyer will only Hyflux if it comes with Tuaspring.
 

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#47
[QUOT]Imagine Noble restructures, Shareholders and bondholders lose >90% of their investment and the management happily emerge from the ash of with a 20% stake revamped billion-dollar Noble while collecting their high pay. This is the worst restructuring plan I ever heard.[/QUOTE]

We do not believe Noble is acting in the best interests of all its stakeholders - Goldilocks Investment
https://www.ft.com/content/f380440c-1c80-11e8-956a-43db76e69936

Noble's losses translate to S$750K a hour for the last FY. The management wants to wipe out the creditors, shareholders and bondholders (except themselves) and get a clean balance sheet to restart.
They are the root of the problem.
 

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#48
Fucktard CEO gets S$3000 an hour (including holidays and sleeping time), while writing off S$750K an hour. Now management seeking 20% of the restructured company for their efforts, while bondholders write off over a billion dollars.

STI enters fifth consecutive session of loss as market confidence shaken by potential Noble defaults in March.
Noble hit new historical low in share price of 15cents from 2011 high (share-consolidation adjusted) of $23.40 (down 99.4%).

Noble Paid Its Co-CEO US$20 Million as Losses Hit $5 Billion
https://www.bloomberg.com/news/arti...d-co-ceo-20-million-as-company-lost-5-billion
 

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#49
honestly, MAS's silence is deafening, despite the uproar

Hyflux and NobleInvestors were referred to the Consumer Issues Division, which give standard replies to both group of investors, claiming that these were "commercial issues", investors should "consult your stockbroker or other professional adviser to determine the best course of action".




Even bloomberg posted an article today, citing the evil-intent of Noble's management:
https://www.bloomberg.com/news/arti...oble-s-restructuring-plan-is-raising-concerns

One incident that has prompted investors to raise questions was Noble’s sale of a $750 million bond due 2022 in March 2017, just two months before the company posted a surprise net loss.

The loss prompted queries on whether there was sufficient bond investor disclosure and at that time, MUFG Securities Asia Ltd. said that investors “may well” question the extent Noble’s management knew of the loss. On page 5 of the restructuring term sheet, the clause states that the arrangement provides the “full release of any and all other claims” that any senior creditor may have against Noble Group, its management, directors, advisers, agents and representatives in relation to its existing senior debt.

“Such language aims to absolve Noble, its advisers and representatives from claims or legal action related to its senior creditors’ pre-existing debt securities,” said Basil Hwang, a managing partner at Hwang Hauzen LLP, who specializes in financial regulation.

“If they sign it, they likely won’t be able to sue Noble, its auditors or the underwriters of its bonds,” said Alex Turnbull, Singapore-based managing partner at the hedge fund and a former Goldman Sachs Group Inc. banker.
 

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#50
Both Hyflux and Noble hit new historical lows today.

Still no case for CAD or regulators? Noble's management fear that a liquidation which will expose their wrong doings.
 

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#52
Once the darling of investors in mid-2010s, SGD perpetual bonds face sell-down as contagion effects felt from Hyflux and Noble perpetual bonds meltdown. Corporate perpetual SGD bonds no longer perceived to be as safe as the yields reflect.

Many SGD perps trading lower since beginning of the year....

ARA Asset Management 5.2% Perpetual
Beginning of 2018: 102.8
Current Price: 99.8

Ascott REIT 4.2% Perpetual
Beginning of 2018: 106
Current Price: 104

First REIT 5.68% Perpetual
Beginning of 2018: 103
Current Price: 101

Hotel Properties 4.65% Perpetual
Beginning of 2018: 103
Current Price: 100.5

Julius Baer 5.75% Perpetual
Beginning of 2018: 105.5
Current Price: 103.7

First REIT 5.68% Perpetual
Beginning of 2018: 103
Current Price: 101

Starhub 3.95% Perpetual
Beginning of 2018: 102
Current Price: 99.8

Singpost 4.25% Perpetual
Beginning of 2018: 106
Current Price: 103.5
 

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#53
In 18 days, a US$379million bond + interests is due for payment for Noble (about $500million + interests).
https://www.bondsupermart.com/main/bond-info/bond-factsheet/XS0906440333

In 8 days, the interest payment for a US$750million bond is due.
About US$32.8million or S$43million.
https://www.bondsupermart.com/main/bond-info/bond-factsheet/XS1577338772
On Monday morning, Noble announced that it had decided not to pay a coupon on its 2022 bond that was due on Friday. "The clock is really ticking," said Jean-Francois Lambert, a consultant and former head of commodity trade finance at HSBC Holdings Plc. "The domino effect of default would be like a tsunami."

https://www.bloomberg.com/news/arti...ions-narrow-as-saga-heads-for-march-20-crunch

So hyflux is next?
 

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#55
If the bondholders say NO, they can aspire to a recovery of between 45-55c on the dollar, cash. Bonds are actually a little above that.

The deal is an ASYMMETRY for the management.

  • If the company (that they bankrupted) ‘goes into liquidation’, they pocketed fees, going away with millions in salaries & bonuses.
  • If the company does not go in liquidation, the failed management and its failed VPs also end up winning a 20% stake in the reformed entity, are absolved from criminal prosecutions perpetuating the siphoning with the next-to-become-losers…

To sum up they win, you lose.
http://www.valuewalk.com/2018/03/noble-debt-is-worth/
 

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#60
so smelly - they defaulted on both coupon and redemption payments for bonds to hold bondholders hostage to vote for restructuring.
The management is engineering a restructuring, because liquidation will probably expose the evil deeds of the management.

Troubled commodity trader Noble Group said on Friday it had not, and would not, make payments in relation to debt notes due in 2018 and 2022.
https://www.reuters.com/article/us-...ated-to-notes-due-2018-and-2022-idUSKCN1GS1CJ
 
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