This week’s news: Cash Converters signs new funding and banking facilities, CML provides its monthly update for investors, Coffey intends to redeem notes, Downer reports its results for 1H16, Emeco provides an operational update, we assess the Sugar Industry Amendment Bill and potential impact for Mackay Sugar and MyState sub debt bond is added to the DirectBond list
Positive news as Cash Converters signs new funding and banking facilities
Cash Converters (CCV) has announced it has signed agreements to replace its funding and transactional banking facilities. This comes after its incumbent bank Westpac gave notice in August that it was withdrawing from the sector.
Read more
CML Group monthly investor update
As part of the requirements of its bond issue, CML provides monthly investor reporting. Details include eligible receivables and a statement of compliance with its covenants. The Group is performing well and offering attractive value for a senior secured bond. Here is a link to the ASX announcement
and to the full research note.
Coffey intends to redeem notes
Subsequent to the takeover by Tetra Tech, Coffey has notified investors of its intention to redeem its notes early at a significant premium. This is a great outcome for Noteholders.
All Noteholders of the Coffey floating rate Notes due 12 September 2019 should have received an email from us including a Notice of Circulating Resolution and Explanatory Memorandum from Coffey as well as research on the proposed resolution. Read the
full update.
Downer reports 1H16 results
Downer has reported its results for 1H16. Net profit after tax is down 24% to $72m reflecting the intense and challenging conditions in the mining and energy markets but the company is guiding an improvement in earnings in the second half. The company’s balance sheet is in a healthy position with gearing at 8.4% and available liquidity of $1.0bn. We remain comfortable with the credit. Read the
full update.
Emeco provides operational update for 2Q16
Despite generating positive operating cashflow, Emeco’s cash position continues to weaken. Full year earnings have been downgraded to take account of a weak Canadian oil sands market. It is becoming increasing likely that the company is heading towards a default scenario in the absence of a recovery in earnings. We look at the Atlas Iron experience as a guide to how bondholders fare in a mining-related default scenario. Read the full update.
Mackay Sugar
Last week, our analyst spoke with Mackay Sugar’s CFO Peter Gill to discuss the introduction of the Sugar Industry Amendment Bill. The amendment bill was passed in Queensland parliament on 3 December 2015. The legislation:
- Enables growers to choose who markets their sugar (‘grower economic interest (GEI) sugar’)
- Provides for non discrimination between growers, regardless of who they choose as the marketer of GEI sugar
- Provides for a pre contractual dispute resolution process, including arbitration to deal with deadlocks
The amended bill should have no material financial impact on Mackay Sugar. Read the full update.
MyState Bank sub debt added to the DirectBond list
We have added MyState Bank’s (MyState) floating rate subordinated bonds to the DirectBond list.
MyState is an Australian financial group, headquartered in Tasmania; it was formed in 2009 following the merger of the Tasmanian Perpetual Trustees and MyState Financial. MyState has very strong capitalisation with a risk adjusted capital ratio of 16.2% in FY15. However has a small market share of only 0.13% of total system gross loans and advances, and about 0.2% of household deposits at FY15.
The bonds are available to wholesale clients only in A$10,000 minimum parcels. Click to view the factsheet