Asian Pay Television Trust (APTT)

[Greenrookie]

There's an apparent contradiction in their prospectus. They state they will amortize a portion of the principal of their term loan over 7 years. However, in the 2014 forecast cashflow, I find no mention of this repayment. If someone can point me to a resolution, would be good.

Hi Tanjm,

I was reading the prospectus again, and I wonder if the amortization must be done consistently over the 7 years, can they not push backwards this item?

I ask because looking the covenants of loans:

Gross debt/EBITDA ratio not exceeding 5.75 times for the initial four quarters, gradually
stepping down to 3.0 times after the sixth year;
• Interest coverage ratio of at least 2.50 times, gradually increasing to 3.00 times after the first
2.5 years; and ----
• Debt service coverage ratio of at least 1.20 times, gradually decreasing to 1.05 times after the fourth year.

Could that be pushing backway that ammortization costs so that they can meet the projected payout in 2014??

More of a question than an answer

[Greenrookie]

There's an apparent contradiction in their prospectus. They state they will amortize a portion of the principal of their term loan over 7 years. However, in the 2014 forecast cashflow, I find no mention of this repayment. If someone can point me to a resolution, would be good.

Hi Tanjm,

I was reading the prospectus again, and I wonder if the amortization must be done consistently over the 7 years, can they not push backwards this item?

I ask because looking the covenants of loans:

Gross debt/EBITDA ratio not exceeding 5.75 times for the initial four quarters, gradually
stepping down to 3.0 times after the sixth year;
• Interest coverage ratio of at least 2.50 times, gradually increasing to 3.00 times after the first
2.5 years; and ----
• Debt service coverage ratio of at least 1.20 times, gradually decreasing to 1.05 times after the fourth year.

Could that be pushing backway that ammortization costs so that they can meet the projected payout in 2014??

More of a question than an answer

sorry, just saw this clause, ignore my babbling:

7 year partly amortising Term Loan facility. Revolving Facility is a bullet loan.
The outstanding amount under the Term Loan Facility will be amortised on a quarterly basis over a period of seven years in accordance with an agreed amortisation schedule with a final repayment of all outstanding principal on the final maturity date, which will equal 44.5% of the total loan amount drawn under the Term Loan Facility.

[Nick]

I got this from DBSV Initiation Report pg 31 (dated 14 August 2013):

Debt amortisation will not be significant. The current amortisation profile is back-ended, and initially there is no loan amortisation required till 1Q14. Even in FY14-15, loan amortisation is less than 1% p.a. and we believe the Trust will refinance the credit facilities sometime in 2015 to further stretch out the amortisation profile.

[Greenrookie]

I got this from DBSV Initiation Report pg 31 (dated 14 August 2013):

Debt amortisation will not be significant. The current amortisation profile is back-ended, and initially there is no loan amortisation required till 1Q14. Even in FY14-15, loan amortisation is less than 1% p.a. and we believe the Trust will refinance the credit facilities sometime in 2015 to further stretch out the amortisation profile.

Hi Nick,

IMHO, I think the discrepancy of what is described in the prospectus and what is said in the report in too large.

In the prosepctus,
"The outstanding amount under the Term Loan Facility will be amortised on a quarterly basis over a period of seven years in accordance with an agreed amortisation schedule with a final repayment of all outstanding principal on the final maturity date, which will equal 44.5% of the total loan amount drawn under the Term Loan Facility."

I take that to mean they will start repaying from the first quarter through the 7 years. Granted, they mentioned about a agreed scheduled, but with reference to the above clause, I thought the schedule, will talk about the amount to be ammortized and not the time. I can't find details of the schedule in the prospectus.

I have email the IR regarding this discrepancy, the funny thing is they send an reply asking for my phone number so that they could contact me, which I duly supplied, although I did ask why they could not give an email reply.

I have not heard of them yet, if they do reply, I willl post their reply here. If I don't, means they do not want to reply me.

side calculations,

If they ammortize they loans from the first quarter, such that 54.5% of loan is repay over 7 years, they need to fork out 18 SGD million every quarter.

If like what the report says, they only do it it 2014, then the sum will be even bigger. If they do only token amortization and then refinance the loan in 2015 as per stated in the report, then they are paying lipservice when they say they want to ammortize their loans, in would in fact be a refinancing when times come model very similar to reits...

[Nick]

I got this from DBSV Initiation Report pg 31 (dated 14 August 2013):

Debt amortisation will not be significant. The current amortisation profile is back-ended, and initially there is no loan amortisation required till 1Q14. Even in FY14-15, loan amortisation is less than 1% p.a. and we believe the Trust will refinance the credit facilities sometime in 2015 to further stretch out the amortisation profile.

Hi Nick,

IMHO, I think the discrepancy of what is described in the prospectus and what is said in the report in too large.

In the prosepctus,
"The outstanding amount under the Term Loan Facility will be amortised on a quarterly basis over a period of seven years in accordance with an agreed amortisation schedule with a final repayment of all outstanding principal on the final maturity date, which will equal 44.5% of the total loan amount drawn under the Term Loan Facility."

I take that to mean they will start repaying from the first quarter through the 7 years. Granted, they mentioned about a agreed scheduled, but with reference to the above clause, I thought the schedule, will talk about the amount to be ammortized and not the time. I can't find details of the schedule in the prospectus.

I have email the IR regarding this discrepancy, the funny thing is they send an reply asking for my phone number so that they could contact me, which I duly supplied, although I did ask why they could not give an email reply.

I have not heard of them yet, if they do reply, I willl post their reply here. If I don't, means they do not want to reply me.

side calculations,

If they ammortize they loans from the first quarter, such that 54.5% of loan is repay over 7 years, they need to fork out 18 SGD million every quarter.

If like what the report says, they only do it it 2014, then the sum will be even bigger. If they do only token amortization and then refinance the loan in 2015 as per stated in the report, then they are paying lipservice when they say they want to ammortize their loans, in would in fact be a refinancing when times come model very similar to reits...

I don't think the amortization profile consists of fixed quarterly payment throughout the remaining 6 years. It will probably resemble a ballooning amortization profile - just like MIIF previous investment in Hua Nan Expressway. If I recall correctly, TBC used to have a ballooning amortization as well - it didn't need to make repayment for 2011-2013 and start repaying in 2014 but MIMAL refinanced the loan structure with the recent IPO. Granted, it needed to do an equity injection at asset level to refinance its debt then. However, TBC is much more well capitalized asset now with the IPO and is a listed entity signalling lower capital risk profile. I don't see why they shouldn't refinance. Unlike infrastructure assets with fixed lifespan, this is theoretically a perpetual business with slightly growing EBITDA. If REITs with its 30 - 99 year lifespan can refinance, why not a 'perpetual' business ? Of course, this is another risk investor has to take note of - if they can't refinance, then it is likely distributions will be cut in the future to make payment or equity will be raised (just like any REIT/trust).

(Not Vested)

[Greenrookie]

I got this from DBSV Initiation Report pg 31 (dated 14 August 2013):

Debt amortisation will not be significant. The current amortisation profile is back-ended, and initially there is no loan amortisation required till 1Q14. Even in FY14-15, loan amortisation is less than 1% p.a. and we believe the Trust will refinance the credit facilities sometime in 2015 to further stretch out the amortisation profile.

Hi Nick,

IMHO, I think the discrepancy of what is described in the prospectus and what is said in the report in too large.

In the prosepctus,
"The outstanding amount under the Term Loan Facility will be amortised on a quarterly basis over a period of seven years in accordance with an agreed amortisation schedule with a final repayment of all outstanding principal on the final maturity date, which will equal 44.5% of the total loan amount drawn under the Term Loan Facility."

I take that to mean they will start repaying from the first quarter through the 7 years. Granted, they mentioned about a agreed scheduled, but with reference to the above clause, I thought the schedule, will talk about the amount to be ammortized and not the time. I can't find details of the schedule in the prospectus.

I have email the IR regarding this discrepancy, the funny thing is they send an reply asking for my phone number so that they could contact me, which I duly supplied, although I did ask why they could not give an email reply.

I have not heard of them yet, if they do reply, I willl post their reply here. If I don't, means they do not want to reply me.

side calculations,

If they ammortize they loans from the first quarter, such that 54.5% of loan is repay over 7 years, they need to fork out 18 SGD million every quarter.

If like what the report says, they only do it it 2014, then the sum will be even bigger. If they do only token amortization and then refinance the loan in 2015 as per stated in the report, then they are paying lipservice when they say they want to ammortize their loans, in would in fact be a refinancing when times come model very similar to reits...

I don't think the amortization profile consists of fixed quarterly payment throughout the remaining 6 years. It will probably resemble a ballooning amortization profile - just like MIIF previous investment in Hua Nan Expressway. If I recall correctly, TBC used to have a ballooning amortization as well - it didn't need to make repayment for 2011-2013 and start repaying in 2014 but MIMAL refinanced the loan structure with the recent IPO. Granted, it needed to do an equity injection at asset level to refinance its debt then. However, TBC is much more well capitalized asset now with the IPO and is a listed entity signalling lower capital risk profile. I don't see why they shouldn't refinance. Unlike infrastructure assets with fixed lifespan, this is theoretically a perpetual business with slightly growing EBITDA. If REITs with its 30 - 99 year lifespan can refinance, why not a 'perpetual' business ? Of course, this is another risk investor has to take note of - if they can't refinance, then it is likely distributions will be cut in the future to make payment or equity will be raised (just like any REIT/trust).

(Not Vested)

Hi nick,

U are right, their IR did call back. The amortization is like a balloon, starting in 2014 and paying little in 2014 and 2015. The bulk will be paid in 2016 onwards and they will try to refinance it before that.

He mentioned Taiwan debt structure doesn't have or does not commonly offer bullet loans, so this is currently the best structure. He admits it not ideal and hope Taiwan debt structure will mature, an they might look into bonds too.

So the amortization is just a wayang ...

[Sylvan Beau]

hi guys ~~ this the latest news i got on APTT:

http://news.ifeng.com/taiwan/3/detai...068333_0.shtml

The authority in Taiwan is enforcing all PRC investors to be out of APTT within 21 days.

I am vested in this counter. Share prices been dropping. Wonders any advise on should I hold or cut losses?

By the way, has the NCC officially granted them the permit to expand into Greater Tai Chung area?

[cyclone]

hi guys ~~ this the latest news i got on APTT:

http://news.ifeng.com/taiwan/3/detai...068333_0.shtml

The authority in Taiwan is enforcing all PRC investors to be out of APTT within 21 days.

I am vested in this counter. Share prices been dropping. Wonders any advise on should I hold or cut losses?

By the way, has the NCC officially granted them the permit to expand into Greater Tai Chung area?

The above mentioned link is broken.

Is it this one http://sd.ifeng.com/zbc/detail_2013_12/1...35_0.shtml ?

[promptpost]

here's the english version.

News was dated 10 Dec :-

http://www.taipeitimes.com/News/taiwan/a...2003578693

And an updated nes on 12 Dec :-

http://www.taipeitimes.com/News/front/ar...2003578836

[promptpost]

TBC or APTT need to buy back those shares in the hand of the Chinese national; otherwise facing fine.

Since news was almost one week ago. All the negative effect already priced in.

APTT share price is weak; just like every other counters during this market correction.