Hotel Properties recently announced the issuance of its Senior unsubordinated bonds at a final price guidance of 5.25%. The bond is a plain vanilla bond that comes with a tenor of 5 years. As these bonds are ranked Senior, in terms of debt repayment it will be paid out before those of junior subordinated debts. The coupon payments for these bonds are paid out semi-annually and are scheduled on 9 March and 9 September each year, with the first coupon payment being disbursed on 9 September 2023. This bond is non-rated and the net proceedings arising from the issuance will be used to refinance its existing borrowing and financing working capital.
Hotel Properties Limited (HPL) is a hotel owner and operator with interest in 39 hotels across 15 countries. A few well-known brands from HPL are Four Seasons, Hilton International, InterContinental Hotels Group and Six Senses Hotels. HPL is also a property developer in the premium residential and commercial property market. Forum The Shopping Mall and Concorde Singapore are a few prime commercial and retail properties that it owns and these are located in the main shopping belt of Orchard Road in Singapore. As at 2nd February 2023, HPL has a total market cap of $1.851bn.
In FY2022, HPL recorded an increase in its revenue by 52.7% YoY from $344.2 million in FY2021 to $525.5 million. This was attributable to stronger performance by the group’s hotels and resorts, as the re-opening of most countries’ borders have spurred more demand for tourist accommodation. This also resulted in their cash generated from operations to increase from $56.6 million last year to $147.9 million for the year. HPL’s share of results of associates and jointly controlled entities also turned profitable to $38.3 million in FY2022 from the previous loss of $9 million for the year ended 31 December 2021. This improvement was mainly due to the gain from disposal of Hilton London Olympia and fair value gain from revaluation of Paddington Square London. Announced on 20 December 2022, the disposal sales price of all 7 shop units that HPL owned in Ming Arcade is expected to be $61 million.
As for HPL, in FY2022 its operating cash/debt ratio stood at 9.34% with total debt amounting to $1.58bn ($215 million are short-term debts). Cash and Bank balances for HPL amounted to $105 million while interest coverage is at 1.91 times.
As the initial offering has closed for subscription, investors who are interested in these notes will have to head onto the bond’s secondary market in our POEMS platform to get hold of them. These notes can be transacted in a minimum lot size of SGD$250K.