how come now like not willing to redeem all 248 million.......

want to retain all our money and
add more selling the new exchange sukok..

looks like FSM is going to say yes for all of us,
are you going to say No to FSM?
FSm dapat something kah from tropicana?


so what are the possible scenarios now?

1) Take the offer no redemption money , get the new sukok and RM625 consent fee

2) Offer rejected, again we dont get back the redemption money
we carry on with the old Bond getting 9% with its inherrent higher risk

i believe quite alot would take the exchange even though coupon rate only 6.25%, less risky mah 4 yrs maturity.

bro you happy too fast or not?

I haven't read the announcements in pdf in detail. I'm travelling and having problem with pdf app.

When is the last day we need to advise our decision (to whom?). I have one lot via cimb, so just instruct them?

Yeah, FSM decision for all their investors is not that convincing. In the 1st place, why are they not asking for individual vote?

It is a bummer, this strong arm tactic by Tropicana. And why such short notice? If I recall reading, they are required to give one month notice if not making a call?

Also wonder why individual investors not allowed to take their money if they want to even if 75% agree to convert to new Sukuk?

Whether it's a good option or not is not the issue. Personally I just want my money back now. What they are proposing despite announcing the new sukuk issuance and use of funds and large asset sales just looks contradictory to me, and doesn't show confidence. And it's only for RM248m.

That's why I do not want any more Malaysian perpetuals. Ever.

This post has been edited by BWassup: Sep 13 2024, 09:35 AM

Has this ever happened before in Malaysian history? It's a switch-a-roo. We got played!

At the end of the day, Tropicana will get the headlines that it redeemed Tranch 1 of the perpetuals, but only because they forced everyone onto a 4-year IMTN.

And getting a much cheaper rate than penalty rate for not redeeming, without spectre of failing to call?

But all still depends on institutional vote to gather the 75%.

Looks like they don't intend to redeem no matter what the outcome of the EGM?

I.e. if rejected, will result in penalty rate. That might force them to quickly redeem it from their land sale funds. Or renegotiate a better deal than the proposed conversion, which is not that attractive for a less attractive and more opaque company like Tropicana. Otherwise it will jeopardise their SUKUK program, and the other sukuk issue.

Will vote to reject it. IMO, nothing to lose, more to gain.


This post has been edited by BWassup: Sep 13 2024, 10:46 AM

I think accepting a lower coupon for 4 years is more risky, given Tropicana's relatively weak financials and corporate governance. The mini consent fee is ridiculous, compared with penalty rate of +2%

We have already been on tenterhooks past 3 years or so, why want to endure another 4 years. For sure you can't exit without a loss in the secondary market. And no guarantee they will be able redeem even with fixed maturity.

FSM analysis and decision is very disappointing.

Investors need to force their hand with Tropicana.

This post has been edited by BWassup: Sep 13 2024, 11:01 AM

They don't say they will redeem if they lose the EGM, but logically they would cause otherwise they are subject to a higher rate. The thing is, there are provisions for them to defer the coupon payments.

I still think they won't go to that extent, it will be viewed as a credit negative event. So once they get their liquidity in order, they should redeem by March or Sep 2025.

I just wrote in to FSM to demand a reason as to why they are voting YES. They should ask individual bondholders to vote and take the majority decision.

All in all, you learn a new thing every day. We are but small fish in a big pond. The high and mighty have crafty ways to escape things that us little men have no avenue for!

They did say if don't reach 75% acceptance, to continue with existing perpetuity.

Redeem September 2025? Any particular reason for taking so long? Their property sales should come in soon. And new sukuk possible.

* FSM is unprofessional. I also wonder why.....

This post has been edited by BWassup: Sep 13 2024, 11:08 AM

Only way is a few FSM bondholders of the Tropicana 7.00% sukuk get together. Individually, we may not be able to do much of anything.

Sorry you're talking about fsm vote. How big is FSM holding?

Only institutional investors have any influence on the vote.

Think foreign institutions will not like this last minute proposal. They have stricter mandates and any sign of "wayang" proposals like this will not be looked upon kindly.

This post has been edited by BWassup: Sep 13 2024, 11:21 AM

Which institutional investors are holding Tropicana perpetuals? Usually perpetuals are not on the radar for institutional investors. Plus this 7.0% was not-rated at the point of launch if I recall correctly.

No lah, our original Bond is much more riskier
this new Sukok is Senior secured, mati mati mesti bayar

our ori Bond if Tropicana plays dirty
tak mahu bayar
defer coupon how? we cant do anything



if AGM failed semua orang hold back old ori bond
Tropicana wont redeem, cant pay 9% coupon
can defer....

fact is Tropicana still unwilling to fork out RM248 Million to redeem all
so play this exchange offer now.
if redeem for a few sure ada duit lah....when majority take exchange offer

The original perpetual is also a SENIOR SECURED. No difference.

Tropicana can defer the coupon indefinitely, but they won't be able to do a lot of things in the mean time with regards to dividend or other capital raising.

Wow. Just finished reading this saga. This is a royal shitstorm in brewing…..

Yeah. They will also be in a difficult position with banks as well (e.g. potential cross default clauses), depending on specific facility restrictions. Both bonds are secured by the same properties, so no difference there.

I spoke to FSM and also have an email from them.

1. This Exhange Offer is a historic first in the Malaysian market.

2. FSM dealer claims that it doesn't matter how they vote. The indication from other sukuk holders during the meeting with Tropicana was that they were favourable of this arrangement, so the 75% threshold will be met either way.

3. The new bond will be listed on Bond Express.

4. They make no promises but will provide liquidity for current holders to exit if there is demand for the bond in the secondary market.

5. FSM reserve the right to vote for Bond Express holders as they act as the principal.

6. Zero fees involved, we get 0.25% from Tropicana as a penalty fee of sorts.

7. There are around RM9mil odd lot holders who purchased via Bond Express

8. Indication is to conclude the Exchange Offer in late Oct 2024

...............

My take is maybe it's not all that bad, just that the principal is tied up for another 4 years.

6.25% is a decent yield. With Fed rate cuts incoming, bond prices generally will rise. So we might still be able to exit at par.

Also MARC has given a A rating with stable outlook for this new issuance.

This post has been edited by contestchris: Sep 13 2024, 07:55 PM

full details not out yet..
but i understand it is to be ranked a notch higher
than our perpetual bond

perpetual bond forever we are at their mercy
with the added clause some more
that allows for indefinite deferment of coupons
and not considered as default pulak!

ini new one tak sama
tak bayar coupon is default



that is what i think also...


blessing in disguise ......
save me the trouble where to look to dump the money if called back

4 yrs senior secured bond at 6.25% at ZERO fee!
that Tropicana bond i paid 1.5% fee lo...
not like you all in Singapore
so lucky no fee
got discount lagi!

anytime better than the 4.75% ASM

This post has been edited by guy3288: Sep 13 2024, 09:18 PM

Good way to look at it.

I thought bond subscribers are sophisticated investors?

I worked at GS/JPM/CC and recently thought of retiring back to MY so let me just ask some questions:

Ya'll do know that callable is an OPTION for the ISSUER right? This means Tropicana can choose to call back or not call back the bonds.

When ya'll bought the perp bond, the maturity date is 2119, 100 years from 2019, you know you basically agreed to borrow money to Tropicana for 100 years, right?

If ya'll already know and prepared to borrow money to Tropicana for 100 years why some people are saying things like "We are but small fish in a big pond. The high and mighty have crafty ways to escape things that us little men have no avenue for!" when YOU MADE YOUR OWN DECISIONS? There is no invisible hand or power at play here. Issuer is within their rights to not call back the bond at all.

This exchange offer isn't that bad at all from what I read, more protection (senior sukuk), lower interest (which benefits Tropicana but hurt old owners), yes the callable is few more years down the road, but remember what I said? Callable means that it's an option for issuer, not an obligation, their obligation is to redeem the bonds by YEAR 2119.

this is actually a corporate debt restructuring exercise. key tell-tale sign is the need to get 75% debt holders agreement and usually the firm would already spoken to the institutions about this restructuring. "retail" bond holders usually just follow what the major debt holders of that tranche decide.

btw, what firm is CC? China Construction?