- Genting Bhd has completed the book-building process for the issuance of its medium-term notes (MTN).
- The total size of the MTN is RM2bil, to be issued in two tranches.
- The first tranche is RM500mil while the second tranche will be RM1.5bil.
- The MTN will be issued at par.
- Coupon rate for the first tranche is 4.42% p.a. while the second tranche will command a coupon rate of 4.86%.
- Issue date of the MTN is 8 June 2012.
- During the conference call recently, Genting Bhd indicated that they would be using part of the MTN proceeds to repay its US$300mil (RM945mil) bonds, which are due in FY14F.
- As for the balance RM1bil of the MTN proceeds, Genting Bhd does not have any plans in mind yet.
- The group is taking advantage of low borrowing costs in the market to raise funds.
- Impact of the MTN on Genting Bhd's net profit is insignificant.
- We estimate that coupon payments arising from the coupon rates of 4.42% to 4.86% on the two tranches would only reduce Genting Bhd's FY13F net profit by 2%.
- We maintain a BUY on Genting Bhd.
- We believe that the recent fall in Genting Bhd's share price represents a good opportunity to accumulate.