SINGAPORE Post (SingPost) said in a bourse filing on Wednesday (Mar 30) evening that it will be issuing S$250 million in perpetual securities with an initial distribution rate of 4.35 per cent per annum for the first 5 years.

 

The distribution rate will be reset on Jul 6, 2027 to a rate equivalent to the 5-year Singapore Overnight Rate Average Overnight Indexed Swaps, in addition to an initial spread of 2.183 per cent and a step-up margin of 0.25 per cent.

 

This distribution rate will be reset again on Jul 6, 2047, with the step-up margin increased to 1 per cent, while everything else remains the same.

 

Its expected to be issued on Apr 6 this year with no fixed redemption date.

 

These perpetual securities will be issued under a S$1 billion multicurrency debt issuance programme.

 

The money raised from the sale of these perpetual securities will be used for SingPost' s general corporate purposes, including the refinancing of its existing borrowings.

 

With the exception of the first distribution which will be for the period between Apr 6 and Jul 6, the subsequent distributions will be paid out every 6 months.

 

Like all perpetual securities, SingPost : S08 -1.52%can choose to stop paying distributions for an indefinite period.

 

Singapore Post (SingPost) says subsidiary SingPost Group Treasury has, on March 29, issued $100 million worth of five-year notes.

 

The notes will carry a coupon of 3.23% per annum and will be drawn down under the $1 billion multicurrency debt issuance programme.

 

The senior unsecured fixed rate Series 002 notes are guaranteed by SingPost. They come in denominations of $250,000 each, and will mature on March 29, 2027.

 

According to SingPost, the net proceeds from the issue of the notes will be used for general corporate purposes including the refinancing of SingPost&rsquo s, as well as its subsidiaries&rsquo existing borrowings.

 

The Notes are expected to be admitted to the official List of the SGX-ST with effect from 9 am on March 30.

 

DBS Bank and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch (HSBC) were appointed as the joint lead managers.

SINGAPORE Post (SingPost) SingPost: S08 +0.79% is likely on the verge of a strong recovery and should continue to benefit from the growth in e-commerce in both domestic and overseas markets, said UOB Kay Hian.

 

In a report on Wednesday (Mar 2), analyst Llelleythan Tan upgraded the postal service provider to a " buy" call and raised its target price to S$0.78 from S$0.75, as he expects the e-commerce segment will outperform in the fourth quarter of FY2022 and beyond.

 

Shares of SingPost were trading at S$0.64 as at 11.27 am on Wednesday, up S$0.005 or 1.6 per cent.

 

SingPost on Friday reported a 46 per cent on-year growth in group operating profit to S$38 million for its third quarter ended Dec 31, 2021, driven by the year-end seasonal peak.

 

Revenue also grew 24 per cent on year to S$437 million, driven mainly by its freight-forwarding arm Famous Holdings, e-commerce logistics growth and the consolidation of Freight Management Holdings as a subsidiary.

 

Tan expects the growth in e-commerce revenue, which has already offset a decline in letter mail, will be its domestic main revenue driver moving forward.

 

The analyst is also more optimistic on international post, as the reopening of Singapore' s borders will likely drive a return in international flights and help soften air freight rates closer to pre-pandemic levels by the first half of FY2023.

 

Additionally, he noted that SingPost' s Australian operations have remained steady despite Omicron outbreaks, while occupancy rates at its property SingPost Centre have also remained stable.

 

Tan said with " an expected inflection point approaching" , the counter likely has significant potential upside at its current attractive price levels.