JTC: Purchase offer is consistent with market practice

WE refer to the article "JTC makes early-buyback offer for Jurong Country Club notes" (BT, Aug 26, 2016).

Prior to 2003, Jurong Country Club (JCC) was a proprietary club under Jurong Country Club Limited (JCCL), a wholly owned subsidiary of JTC. In 1993, to raise capital for a new clubhouse and upgrading works at the golf course, JCC sold 196 memberships bundled with notes issued by JCCL. Each membership with note was priced at S$150,000, comprising S$30,000 for the membership and S$120,000 for the note. The notes were interest-free, unsecured and due for redemption on Sept 1, 2033. In comparison, we understand memberships without notes were trading in the secondary market at S$105,000 to S$119,000 between 1992 and 1993.

In 2003, JCC was converted from a proprietary club to a club owned by its members. The assets of the club, including the clubhouse and golf course, were transferred to the new members' club for the enjoyment of members. In order not to impose a financial burden on the club at its inception, the General Committee of JCC requested JTC to take over the repayment liability of the notes. JTC agreed and issued new JTC notes to replace the original notes issued by JCCL. Other than the change in issuer, the JTC notes are substantially the same as the earlier notes, including the issuer's obligation to redeem in 2033.