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Maxi-Cash offers to buy back 5.5% notes or exchange them for new 6.35% notes

CATALIST-LISTED pawnbroker Maxi-Cash Financial Services is offering to purchase in cash up to S$5 million in total principal amount of its outstanding 5.5 per cent notes due in 2020, and to exchange any and all of these outstanding notes for a like principal amount of new 6.35 per cent notes due in 2022.

The existing notes will mature on April 27, 2020, with S$70 million outstanding. Maxi-Cash and its subsidiaries hold S$4 million in principal amount, the company said on Monday morning before the market opened.

Holders may opt to sell their notes at par plus accrued interest, for up to S$5 million in total principal, although Maxi-Cash may increase this maximum acceptance amount. The tender offer is part of Maxi-Cash’s “ongoing capital management strategy to improve its debt position and to reduce negative carry”, the company said.

Alternatively, all noteholders may exchange their existing notes for new notes. Maxi-Cash said that some noteholders had earlier expressed interest to extend their bond investment and remain invested in Maxi-Cash, given the notes’ impending redemption.

The company said on Monday that issuing the new notes also allows it to extend its debt maturity profile and remain well-capitalised for the next few years.

The new 6.35 per cent unsecured notes are expected to be issued on July 22, 2019 and mature on July 22, 2022, under Maxi-Cash’s S$300 million multicurrency medium-term note programme.

The company will pay the accrued interest plus an exchange fee to holders who exchange their existing notes for the new notes. This fee will be an amount in cash equal to 0.75 per cent of the principal amount exchanged, for every S$250,000 in principal amount.

Existing notes may only be offered for sale or exchange in principal amounts of S$250,000 and integral multiples thereof.

The invitation for the tender and exchange offers will expire on July 12 at 10am.

Existing notes due in 2020 not purchased and cancelled or exchanged will remain outstanding.

DBS Bank is the sole dealer manager for the invitation, while Tricor Barbinder Share Registration Services, a division of Tricor Singapore, is the tender and exchange agent.

DBS is also the sole arranger and dealer for Maxi-Cash’s S$300 million multicurrency medium-term note programme.

Maxi-Cash has about 40 outlets in Singapore for its pawnbroking operations, and the retail and trading of pre-owned jewellery and watches.

Its shares last traded on Thursday at S$0.13.