• Berjaya Sports Toto (BToto) has proposed to set up a medium-term notes programme (MTN) of up to RM800mil. The tenure of the MTN is 15 years.

• The MTN will be used to refinance the existing borrowings of BToto and finance future investments.

• The interest rate of the MTN was not disclosed in the Bursa announcement.

• We believe that BToto is using the MTN to refinance the existing RM800mil MTN. Three tranches of the existing MTN amounting to RM223mil will mature in June 2017 while another RM440mil will mature in different tranches in June 2018, June 2019 and July 2019.

• The interest rate of the existing MTN ranges from 4.6% p.a. to 6% p.a.

• Presently, BToto records interest expense of about RM45mil to RM48mil annually. In FY16, the interest expense was about 10% of the group's EBITDA.

• Maintain HOLD on BToto with a DCF-based fair value of RM3.20/share. BToto is expected to release its 4QFY17 results next week.

Source: AmInvest Research - 16 Jun 2017