More:
Aspial to roll out 5-year 5.25% retail bonds (Straits Times)
Aspial issues a 5.25% bond with minimum $2000 (Investment Moats)
Aspial 5.25% retail bond thoughts (Got Money, Got Honey)
Clearly, the bond is being offered with a higher coupon rate than compared to the upcoming Singapore Savings Bond (for the definitive collection of articles on SSB, check out GiraffeValue's 71 resources on Singapore Savings Bonds).
Some wondered why Aspial would be raising money from the market instead of borrowing from the banks. Checking against POEM's data on Aspial itself, we see some interesting data that can shed some insights:
| Stock Data | |
|---|---|
| Market Capitalization (SGD 'mil) | 703.66 |
| Common Shares Outstanding ('mil) | 1,882.6200 |
| 52 Week High (SGD) (07/08/2014) | 0.455 |
| 52 Week Low (SGD) (03/07/2015) | 0.265 |
| 52 Week Return (%) | -15.940 |
| Average Volume ('mil) | 0.0148 |
| Beta | 0.56 |
| Financial strength | |
|---|---|
| Current Ratio | 3.25 |
| Quick Ratio | 0.99 |
| Long Term Debt to Equity (%) | 247.97 |
| Total Debt to Equity (%) | 342.82 |
| Interest Coverage Ratio (TTM) | 1.28 |
| Free Cash Flow to Firm (TTM) (SGD 'mln) | -34.97 |
| Margin | |
|---|---|
| Gross Margin (TTM) (%) | 24.14 |
| Operating Profit Margin (TTM) (%) | -1.39 |
| Net Profit Margin (TTM) (%) | 3.08 |
| Dividend § | |
|---|---|
| Annual Dividend per share (SGD) | 0.0180 |
| Dividend Yield (TTM) (%) | 2.16 |
| Dividend Yield (Annual) (%) | 4.86 |
| Payout Ratio (TTM) (%) | 95.22 |
| 3-Year Growth Rate (%) | 28.57 |
| Valuation | |
|---|---|
| Historical P/E Ratio | 15.37 |
| P/E Ratio (TTM) | 43.53 |
| P/BV (latest interim) | 2.22 |
| BVPS (latest interim) (SGD) | 0.1669 |
| EPS TTM (SGD) | 0.0085 |
[Source: POEMS; as at 20 Aug 2015]
Aspial's debt-to-equity is more than 340%, with a short term debt of 95% due! This is way above my threshold of 40% that I use to screen for stocks to consider. It has apparently been exercising a very high level of leverage as it expands its business. These are numbers that would raise an eyebrow, or two. It possibly explains why Aspial has resorted to raising cash from the market to refinance borrowings, increase its working capital and to fund future business investments.
I am not buying nor own any shares in Aspial. But I'm going ahead to put in a small bid for this bond tranche.
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