PROPOSED ISSUANCE OF SENIOR UNRATED PERPETUAL SUKUK PURSUANT TO A PERPETUAL SUKUK PROGRAMME OF RM2,000,000,000 IN NOMINAL VALUE UNDER THE SHARIAH PRINCIPLE OF MUSHARAKAH

Issuer: Tropicana Corporation Berhad
Indicative Coupon: 7% area
Tenure: Perpetual Non-Callable 5 years
Issue Rating: Unrated
Seniority: Senior Secured
Distribution Frequency: Semi Annually
Expected First Issue Size: RM200.0 million, with option to upsize (“First Issuance”)
Sole Principle Advisor / Lead Arranger / Lead Manager: CIMB Investment Bank Berhad
Minimum Investment Amount (Nominal Value): MYR250,000
Deadline: 23rd Aug 2019, 12 pm (order after deadline is handled on a case by case basis)

Credit Highlights

1. First tranche of RM 200 million is guaranteed by the founder of Tropicana (Tan Sri Dato’ Tan Chee Sing), who is also the major shareholder at 63% both through direct and indirect interest (as per IM)

2. First tranche also secured by commercial land in Johor Bahru that’s worth more than twice of the first tranche

3. Step-up rate of 2% if bond is not called in the first call date. 1% step-up annually thereafter

4. This perpetual is considered a secured bond and is ranked equally as other senior unsecured bonds of Tropicana

5. Tropicana’s pro-forma (taking into account the proposed tranche’s issue) net gearing is at 0.35x

6. (Total Borrowings less Cash/ Total Equity) compared to SP Setia at 0.64x, UEM Sunrise 0.55x, YNH Berhad at 0.95x while Mah Sing is a net cash company.

7. Only YNH Berhad and Mah Sing offer perpetual bonds with YNH being the direct comparable as the years to next call of YNH perp is in 5 years (similar to Tropicana) while Mah Sing next call date is in 2.64 years

8. Adjusted Net Gearing for the respective developers are:
• Tropicana = 0.35x
• YNH = 0.95x
• Mah Sing = Net Cash

9. Yield to Next Call for the respective bonds are:
• Tropicana = 7%
• YNH = 6.75%
• Mah Sing = 6.14%

how it works?

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This post has been edited by ikanbilis: Aug 20 2019, 02:15 PM

7% Coupon rate...
Not bad 👍 but the minimum entry is kinda high side....
Even previous Maybank bond Coupon rate if I'm not mistaken is around 5%+ only...

I am interested in this, 7% is attractive.

How long should I hold?

See above quoted.

Perpetual - no expiry date.

This post has been edited by cherroy: Aug 20 2019, 02:45 PM

Minimum 250k lah.

https://www.bondsupermart.com/bsm/prelaunch...-factsheet/1547



Is this terms and condition normal?



This post has been edited by Drian: Aug 20 2019, 04:11 PM

7% how come gimme a junk bond feeling.

High yield junk bond

Perpetual Non-Callable 5 years

so i'm confused here..
its perpetual but has a limit of 5 years?
or is that 5 years the non-callable period?

5 years lock-in period, you cannot redeem it during that time.

ic thanks

you have RM252.5k spare money, give it as loan without collateral to a company you have confidence x 5 yrs.
Business running fine you get 7% pa.
5 yrs later you get back RM250k


Perpetual PBB bond (PZ090011) coupon rate 7.5%, completed 10 yrs 5.6.19


Holding power for 5yrs, if price goes up, you want you can cash out early and pass the 7% coupon to the next buyer.



junk bond has high risk of default,not worth the risk for just a 7% return.

you must have better reason to feel it junk
cant be just becos it pays 7%,
care to share with us ?


For that i would expect above 10% coupon rate.


Attached File(s)
 Tropicana_Perpetual_Sukuk_Information_Memorandum__final___1_.pdf ( 2.12mb ) Number of downloads: 50

Just to earn extra 3% than FD but the default risk is there, I don't want.

If we take perpetual bond issuance as debt, the gearing of these companies should be higher... Mah Sing is not net cash in that case.. I think ...

Another question ..if perpetual bonds are never repaid, what happens when companies become insolvent?? Have to depend on other buyers to bail u out?

Not sure about the first part.

But for the second, secured loans/bonds always comes first , then bankruptcy expenses, preference shares etc etc..
They can just keep it in perpetuity .. but need to pay that 7% coupon forever..

1. But it is a secure bond (land).. meaning if Trop goes under, this piece of land is secured to pay off the loan? But the loan is perpetual leh... means how?

2. Callable in 5 years means what? Means paying off in 5 years right? It is not perpetual lah then...

Confused..

1. Yes. Loan je perpetual. I means the term = infinity instead of regular 2year, 5 years etc ...
doesnt effect the land whatsover, unless there are plans to sell the land beforehand.

2, as viktor said. 5 years lock in/noncallable period. can still run perpetual ,

Lovely. Called up my cimb RM. He doesn't even know abt it..sigh..gonna send him the pdf.

Perpetual only in name and financial treatment as equity. Practically it will be called between 5-10years be cause of the stepup interest