‘BBB’ rated Singapore headquartered global logistics firm GLP Pte Ltd.’s bond prices have plunged this week, following a series of investor meetings held on Monday Oct. 10 and Tuesday Oct. 11, according to multiple buyside and sellside sources, although sources were all unable to pinpoint a specific cause for the decline.
In response to Reorg’s request for comment on the situation, a GLP representative gave the following statement: “The company is aware of the market volatility as well as rumors in relation to its recent drop in bond price. However, the company is not aware of any material adverse events that could have resulted in such a decline in the perpetual securities and bond prices. The company remains in strong operating and financial health.”
As of today, Oct. 14 afternoon, the GLP China Holdings $700 million 2.95% due 2026 bond was indicated at 58 / 60 to yield 20.54% bid and 19.46% offer, while the GLP China Holdings $500 million 4.974% due 2024s were indicated at 78 / 80 to yield 25.08 / 23.06, according to two separate buysiders.
The GLP Singapore 3.875% due 2025s were indicated at 67 / 69 to yield 20.79/ 19.43 the same sources added.
As at Oct. 7, the 2.95% due 2026 bond was indicated at 76/77, the 4.974% due 2024s were indicated at 91/92, and the 3.875% due 2025s had been indicated at 84/85, according to a buyside and a sellside source.
The price falls followed investor calls which were held on Monday and Tuesday this week, and which came off the back of the Golden Week holiday in mainland China last week.
Several of the sources spoken to by Reorg pointed to the overall weak market, and impact of continuing turmoil and contagion from China’s real estate market, with two buysiders noting that there are very few buyers for any names. The overall weak market and lack of buyers accentuated GLP’s downward slide, these sources said, particularly following the outfall from CIFI Holdings, a bellwether China real estate developer which
Reorg disclosed on Sept. 27 had missed payment on certain non-standard debt onshore.
Subsequently this week China Construction Bank (Asia) Co., the trustee of CIFI Holdings’ 6.95% convertible bonds due 2025,
sent a notice to bondholders dated Oct. 11 that the principal agent has not received the interest payment under the bond due Oct. 8 and payable Oct. 10, and that an event of default has occurred.
Others noted the further turmoil caused by the new government in the U.K. and its “mini budget”, and subsequent pronouncements from the Bank of England to the effect that a £65 billion bond buying intervention that had stabilized the market could be pulled at the end of this week.
While GLP is not a China property company or a REIT - its business model incorporates data systems, funds and private equity funds, among other elements, and it has operations globally, including in Brazil, the U.S. and Japan - it derives the bulk of its revenues, around 70%, from China.
–Stephen Aldred, Vanessa Gu, Sarah Yuniarni, Dipika Lalwani