SATS

Their board of directors are aplenty, shareholders may ask is there need for so many

$500m and above bond issuance is known as Benchmark Size. My guess is the bond bookrunners have deemed that the market is not ready to absorb a benchmark issue from SATS at the current environment. The last thing bond bookrunners and SATS want is failure to sell out an issuance. Ceteris paribus, a bigger bond issuance will require a higher coupon to sell out. That would mean extra interest expenses to SATS.

(01-04-2020, 07:52 PM)pianist Wrote: Their board of directors are aplenty, shareholders may ask is there need for so many

That's quite true, they have to show that they DO their job! :O
it's cheaper to issue bond at 2.88%, then to issue rights with temasek support? : O

What were they thinking? :O

If capital structure and covenants are not important, not to mention cashflow, everyone would issue bonds

Cruise operator Carnival just issued at 11.5% for investment grade

(02-04-2020, 10:25 AM)Mbrattzz Wrote:

(01-04-2020, 07:52 PM)pianist Wrote: Their board of directors are aplenty, shareholders may ask is there need for so many

That's quite true, they have to show that they DO their job! :O
it's cheaper to issue bond at 2.88%, then to issue rights with temasek support? : O

What were they thinking? :O

and i would have thought SATS is a given, they are dependent on SIA, who is recieving 15B from temasek anyhow! :O

(02-04-2020, 12:24 AM)jfc18 Wrote: $500m and above bond issuance is known as Benchmark Size. My guess is the bond bookrunners have deemed that the market is not ready to absorb a benchmark issue from SATS at the current environment. The last thing bond bookrunners and SATS want is failure to sell out an issuance. Ceteris paribus, a bigger bond issuance will require a higher coupon to sell out. That would mean extra interest expenses to SATS.

Barely 3 weeks for 2nd issue and the interest rate dropped 30bp. It is also interesting that they raised 50% less in this 2nd issue. Would have expected it to try to raise more money with lower rates, since they probably have to dig in for this crisis with their very inflexible cost structure. Could this actually reflect their confidence to raise more money down the road, or the road to recovery?

SATS LTD. PRICES S$100,000,000 2.60 PER CENT. NOTES DUE 2025 PURSUANT TO THE S$500,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME 

https://links.sgx.com/FileOpen/SATS%20Se...eID=607318

Spacing out the loans, taking advantage of the QE printing free money loans in at low, lower interests, since free money has got to go somewhere!! :O

Thought this is an interesting article that interviewed a contractor for SATS. It is normal to employ contractors for your business because it is flexible to adapt to ramp up/down of your operations via contracting.

Based on AR19, SATS has ~14.3k employees through out the region (including subsidiaries), and so this contractor's estimates is around 15% of SATS's regional workforce, which is quite a lot. The employee's costs are recorded under "staff/salary" and the contractors are recorded under "cost of goods" on the P/L.

'We just feel defeated lor': Changi Airport ground crew forced to stop work entirely, employers may close down

As SATS scaled back its operations dramatically throughout the month, it started suspending contracts for jobs that kept — according to Edward's estimations — some 2,000 to 3,000 workers employed.

https://mothership.sg/2020/04/airport-gr...-covid-19/

Also it seems like Covid-19 has landed SATS a temporary revenue stream for the next 1-2months to partially tide through this period: https://mothership.sg/2020/04/sats-forei...rmitories/

30 Apr 2020 SATS profit warning  
(click for details)

4Q profit drop 70% resulting in reduction of 25% FY ended 31 Mar 2020 compared to previous FY.
1QFY21 expecting upto $70m losses.
Positive net cash.
Recently $500m debt to fund working capital, contingency cash reserve and growth initiatives.

Stay home and stay healthy, valuebuddies.

Suspending T4 ops, very closely following T2 which went for earlier scheduled renovation. I believe the decision is about right as i reckon restart costs for an airport terminal should be comparatively cheap and fast to reactivate back, compared to like cold stacking a rig.

Changi Airport T4 to suspend operations from May 16, following T2 suspension earlier; move will save running costs

SINGAPORE - Changi Airport will suspend operations at Terminal 4 from May 16, following a suspension of services at Terminal 2 earlier this month.

In a statement on Tuesday (May 12), Changi Airport Group said: "Changi Airport's terminal operations will be consolidated further to optimise resources in tandem with the sharp decline in flight movements because of the global Covid-19 pandemic.

https://www.straitstimes.com/singapore/t...rom-may-16