Aspial

[butcher]

Any fellow value buddies looking to subscribe?

[greengiraffe]

Any fellow value buddies looking to subscribe?

http://www.valuebuddies.com/thread-820-p...#pid118385

Junk bond crisis brewing... I dare you buddy...

[evolance]

Any fellow value buddies looking to subscribe?

http://www.valuebuddies.com/thread-820-p...#pid118385

Junk bond crisis brewing... I dare you buddy...

Hi GG, pardon my amateurish, i did a quick look, NAV is 300m plus, after this rd of bond issue, if the company winds dwn, the bomd holders will be paid 1st b4 tĥe stockholders.

Based on tis prelimary assessment, safe for this bond?
Jus coming from worse case scenario,not factoring impending interest rate hike or if its not rated.
Or am I missing smt?

[greengiraffe]

Any fellow value buddies looking to subscribe?

http://www.valuebuddies.com/thread-820-p...#pid118385

Junk bond crisis brewing... I dare you buddy...

Hi GG, pardon my amateurish, i did a quick look, NAV is 300m plus, after this rd of bond issue, if the company winds dwn, the bomd holders will be paid 1st b4 tĥe stockholders.

Based on tis prelimary assessment, safe for this bond?
Jus coming from worse case scenario,not factoring impending interest rate hike or if its not rated.
Or am I missing smt?

5.25% for Aspial bonds? FCL now trading on 5.65% on equity... and still rising

Who is Aspial? What is their track record? Shoe box king? Hoot hoot king during good times?

Dun think u are missing anything but many of us missed the unwinding ahead of a normalising of QE...

YMMV
Concussed
GG

[postage paid]

Hi evolance,

This is my humble understanding which may be wrong. Please take with huge mountain of salt.

The debt is raised by an SPV with no assets. So in a default, bondholders first have to "take reasonable steps" to recover money from this SPV.

There is a guarantee by Aspial Corporation which has a NAV of about $200 million. Mainly amounts due from subsidiaries of $600m, investment in subsidiaries of $70m and other investments of $30m less debt of ($500m). The guarantee ranks behind the ($500m) debt.

If you imagine Aspial Corp is like a person whose assets are amounts owed by his family members and close friends, you can understand the transaction structure and why some people are avoiding it.

Yes, in theory debt always ranks before equity. But practically it may not make much of a difference. Enjoy real life!!

[greengiraffe]

Hi evolance,

This is my humble understanding which may be wrong. Please take with huge mountain of salt.

The debt is raised by an SPV with no assets. So in a default, bondholders first have to "take reasonable steps" to recover money from this SPV.

There is a guarantee by Aspial Corporation which has a NAV of about $200 million. Mainly amounts due from subsidiaries of $600m, investment in subsidiaries of $70m and other investments of $30m less debt of ($500m). The guarantee ranks behind the ($500m) debt.

If you imagine Aspial Corp is like a person whose assets are amounts owed by his family members and close friends, you can understand the transaction structure and why some people are avoiding it.

Yes, in theory debt always ranks before equity. But practically it may not make much of a difference. Enjoy real life!!

Hi Postage,

U really paid yr dues in school and the new world...

I certainly agree with you. In Modern corporate world, when a co goes under quite typically everyone goes under. 

Paper theory usually is irrelevant. 

Only the viable companies will stand a chance to be nursed back to health by astute bankers via all sorts of scheme.

Jaya is one painful example that I had experienced during the last GFC.

Odd lots vested
GG

[weijian]

Using Specuvestor's Asset/Business/Structure....With regards to bonds, it might be more applicable to focus on the asset/structure part since bond holders generally do not partake in the growth of the business (the equity owners do), but are more concerned with getting their coupons paid and most importantly, having assurance of their principal been paid back.

VB postage paid has discussed about the 'structure' part.

With regards to its assets, when a company goes under in the future, it is most probably not going to exist in similar form as its current present (as it is been analyzed at this point of time). On its way down, Mgt will be burning cash and other forms of assets to save their own job (and wealth). From a timing standpoint, generally i observed the winners in investing in distressed/pending bankrupt companies, are usually those who come in as the 'white knight', ie. the winners are those who come in when the company is already distressed and demands superior terms over existing bond holders.

[Temperament]

Using Specuvestor's Asset/Business/Structure....With regards to bonds, it might be more applicable to focus on the asset/structure part since bond holders generally do not partake in the growth of the business (the equity owners do), but are more concerned with getting their coupons paid and most importantly, having assurance of their principal been paid back.

VB postage paid has discussed about the 'structure' part.

With regards to its assets, when a company goes under in the future, it is most probably not going to exist in similar form as its current present (as it is been analyzed at this point of time). On its way down, Mgt will be burning cash and other forms of assets to save their own job (and wealth). From a timing standpoint, generally i observed the winners in investing in distressed/pending bankrupt companies, are usually those who come in as the 'white knight', ie. the winners are those who come in when the company is already distressed and demands superior terms over existing bond holders.

Did WB just did that in 2008/2009 fiasco? He is very good playing the role of "white knight", whenever there is an opportunity.

[thor666]

Just noticed aspial has published the bond sale on xin ming ri bao front page, and straits times front insert.

Must be very desperate to get retailer cash.

The koh brothers won't let aspial go down without a fight. But neither is this a free lunch for bondholders as postage and weijian exvellently pointed out.

Those with cash will find it better to buy shareholdings of the white knights, if any comes.by.

Sent from my D5503 using Tapatalk

[weijian]

Did WB just did that in 2008/2009 fiasco? He is very good playing the role of "white knight", whenever there is an opportunity.

WB's very good at this because he has a very durable competitive moat built up over the years, ie. his reputation. It is his reputation rather than his self professed deep pockets, that is chop of assurance. Till this day, i still remember that he made Goldman Sachs pay 8-10% for his convertibles and Harvey Davidson 13-15% for his bonds (or preferred shares/convertibles).