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?

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?

Citi? Chase?

CS, typo, brain thinking Credit Suisse, hand typing credit card 

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.

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.

Obviously the call on the 5th year is optional, it already is a PERPETUAL bond. But the incentive to redeem it is there, due to the step-up penalty.

Even if they choose not to redeem, the way I see it, I rather stick with the perpetual bond and earn the higher interest. It jumps to 9% in Y6, then 10% in Y7, increasing 1% each year until it caps out at 15%. Either that, or just hand me the principal back.

Now Tropicana could also then choose to defer payment of the higher interest, but that will be to their detriment. They will not be able to pay dividends nor perform any capital transactions. It will be viewed as credit negative by the rating agency and the banks who loan them.

The switch-a-roo to the 6.25% 4-yr bond seems far too convenient for Tropicana at the expense of sukuk holders. It is unprecedented in the Malaysian environment, such a binding Exchange Offer has simply never happened!

By the way, you are wrong that there is more protection - the original 7.00% sukuk was also a senior secured sukuk. There is no changes in that regard.

Obviously the call on the 5th year is optional, it already is a PERPETUAL bond. But the incentive to redeem it is there, due to the step-up penalty.

Even if they choose not to redeem, the way I see it, I rather stick with the perpetual bond and earn the higher interest. It jumps to 9% in Y6, then 10% in Y7, increasing 1% each year until it caps out at 15%. Either that, or just hand me the principal back.

Now Tropicana could also then choose to defer payment of the higher interest, but that will be to their detriment. They will not be able to pay dividends nor perform any capital transactions. It will be viewed as credit negative by the rating agency and the banks who loan them.

The switch-a-roo to the 6.25% 4-yr bond seems far too convenient for Tropicana at the expense of sukuk holders. It is unprecedented in the Malaysian environment, such a binding Exchange Offer has simply never happened!

By the way, you are wrong that there is more protection - the original 7.00% sukuk was also a senior secured sukuk. There is no changes in that regard.

The unfairness of it aside, switching from a Perp to a fixed term bond is actually not entirely a bad deal ... at least there'll be clarity for the bondholders

this is a win win situation

at least we help reduce its mad 12% interest loan
taken from the bank when
Tropicana was literally begging
at the mercy of the bankers
to fullfil its obligation to pay out that matured bond.

this new sukok is  just not the same
it is a notch higher in ranking
no nonsense clause can let Tropicana refuse to pay and still say no default
even has obligation for Tropicana to  get ready
standby money to redeem it back in 4 years

Obviously the call on the 5th year is optional, it already is a PERPETUAL bond. But the incentive to redeem it is there, due to the step-up penalty.

Even if they choose not to redeem, the way I see it, I rather stick with the perpetual bond and earn the higher interest. It jumps to 9% in Y6, then 10% in Y7, increasing 1% each year until it caps out at 15%. Either that, or just hand me the principal back.

Now Tropicana could also then choose to defer payment of the higher interest, but that will be to their detriment. They will not be able to pay dividends nor perform any capital transactions. It will be viewed as credit negative by the rating agency and the banks who loan them.

The switch-a-roo to the 6.25% 4-yr bond seems far too convenient for Tropicana at the expense of sukuk holders. It is unprecedented in the Malaysian environment, such a binding Exchange Offer has simply never happened!

By the way, you are wrong that there is more protection - the original 7.00% sukuk was also a senior secured sukuk. There is no changes in that regard.

Obviously the call on the 5th year is optional, it already is a PERPETUAL bond. But the incentive to redeem it is there, due to the step-up penalty.

Even if they choose not to redeem, the way I see it, I rather stick with the perpetual bond and earn the higher interest. It jumps to 9% in Y6, then 10% in Y7, increasing 1% each year until it caps out at 15%. Either that, or just hand me the principal back.

Now Tropicana could also then choose to defer payment of the higher interest, but that will be to their detriment. They will not be able to pay dividends nor perform any capital transactions. It will be viewed as credit negative by the rating agency and the banks who loan them.

The switch-a-roo to the 6.25% 4-yr bond seems far too convenient for Tropicana at the expense of sukuk holders. It is unprecedented in the Malaysian environment, such a binding Exchange Offer has simply never happened!

By the way, you are wrong that there is more protection - the original 7.00% sukuk was also a senior secured sukuk. There is no changes in that regard.

Question re: 9% step up in year 6.

If the proposal is approved, will the 6.25% coupon be backdated to 26 September? Or will it accrue at 9% until the new sukuk is issued?

Imo, the 6.25%% to help them out of their liquidity issue is fairly tame. For a true debt restructuring, the terms would be more onerous on the company. They are also "lucky" that rates have come off a bit of late.

But, of course, we can't compare directly. Just saying...

I think the commercial properties pledged are also not prime ones.

can see your disappointment
expectation for windfall cash 25.9.24 is gone.
think again 
may be not gone at all.

take the new sukok and sell
get back same RM250k, no?
plus some extras also...

if continue with the  old Perpetual bond
lagi susah to sell methinks..
you see it as Tropicana win we lose
sure angry lah

to me is ok Tropicana win lah
did i lose?.. i think no
compared to those who abandoned ship
sold at RM99 i think we are better off.

for those who bought lelong at RM93.50 or so,
the profit of some 17% return remains
got redemption no redemption sama tu!

can see your disappointment
expectation for windfall cash 25.9.24 is gone.
think again 
may be not gone at all.

take the new sukok and sell
get back same RM250k, no?
plus some extras also...

if continue with the  old Perpetual bond
lagi susah to sell methinks..
you see it as Tropicana win we lose
sure angry lah

to me is ok Tropicana win lah
did i lose?.. i think no
compared to those who abandoned ship
sold at RM99 i think we are better off.

for those who bought lelong at RM93.50 or so,
the profit of some 17% return remains
got redemption no redemption sama tu!

Yeah, what you say is logical. I did load up some this year, that's already good gains.

If some are looking to buy more, and others want their money back, the secondary market will be quite lively once the new sukuk is issued. FSM1 will gain as one of the main intermediaries. That's one reason why they are voting for the exchange! 😆

What's the market buying the 7% perps at? On FSM they are no longer offering to buy.

Any idea about the other IMTN due in 2028, what's the going price in the market? Not sure if the transactions via BPAM are accurate.

Re: Tropicana 7% Bond Exchange proposal.

The existing Sukuk has a Security Cover requirement of 2.0x, whereas the new Sukuk 's Security Cover is stated at 1.5x (Exchange Offer Memo Sect. 2.2), unless I misread it.

Is the weakening of the security cover acceptable to you guys? 

No the exiting perpetual also has a security cover of 1.5x. It had a security cover of 2.0x initially when it was unrated, which subsequently lowered to 1.5x when it got rated.