The US$150M notes (listed on the Singapore exchange) could pose...

The US$150M notes (listed on the Singapore exchange) could pose a risk if sales are not strong or there is any sort of mishap. The notes can be redeemed earlier (with penalties) or must be repaid in full in 2018. It is somewhat baffling that they could not raise this money at less than 11% in the current low interest rate environment. This is going to be very expensive if the AUD weakens further. One would assume that they would try and refinance at lower rates in 2018 (assuming the business is doing well and there are takers for new notes etc). Also note the notes are secured by a charge over all the assets. I am looking at taking a position but agree with some of the earlier commentators that there is still a fair degree of risk here.

NOTE 21: FINANCIAL LIABILITIES (NON CURRENT) (continued)
(a ) US$150 million raised from international markets from issuance of 11% Senior Secured Notes, with a maturity date of
15 July 2018. This liability has been converted to AU dollars using an exchange rate of 1.061 (2013: 1.094). All principle in
US dollars is payable at maturity date with interest to be paid semi-annually, in arrears on 15 January and 15 July of every
year. On or after 15 July 2015 the Group may redeem some or all of the Notes at a premium that will decrease over time as
set out below:
15 July 2015 to 14 July 2016 ………. 108%
15 July 2016 to 14 July 2017 ………. 104%
15 July 2017 to 14 July 2018 ………. 102%
15 July 2018 .........……………………... 100%
The notes are represented by one or more global notes and are listed on the Singapore Stock Exchange (SGX-ST) for
trading. The notes are secured by a fixed and floating charge over all the assets of the Group, see note 10.
2014 2013