Straits Trading’s secured exchangeable bonds 1.9 times subscribed

STRAITS Trading’s S$370 million secured exchangeable bond offering has received applications for 1.9 times the amount on offer, the company said on Monday (Feb 13).

This puts the total demand from investors in terms of value at approximately S$700 million. (*see amendment note)

The exchangeable bonds were also listed for trading on the Singapore Exchange on Tuesday, with interest payable on a semi-annual basis each year starting from Aug 13, 2023.

These bonds carry a coupon rate of 3.25 per cent due on Feb 13, 2028, and are exchangeable into ordinary shares of ESR Group at an initial exchange price of HK$22 per share. Compared with ESR’s closing price of HK$16.76 at the launch of the bonds on Jan 30, 2023, the initial exchange price represents a 31 per cent premium.

Net proceeds raised will be used to refinance the group’s existing borrowings, working capital, as well as capital expenditure and investments, said the company in an announcement last month.

“With the proceeds from the exchangeable bonds, Straits Trading aims to maintain a strong balance sheet with sufficient liquidity and position itself well for future opportunities in the market,” it added.

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Chew Gek Khim, executive chairman of Straits Trading, said part of the proceeds will be used to carry out the company’s growth strategy.

Goldman Sachs is the overall coordinator and sole bookrunner of the deal.

*Amendment note: A company representative has corrected earlier figures for the total demand from investors in terms of value from SS$703m to “approximately S$700 million”. The article has been amended to reflect this.