Maxi-Cash Financial Services has offered to buy back up to S$5 million of its S$70 million 5.50 percent notes due 2020, or to exchange all of the notes for 6.35 percent notes due 2022, the pawnshop operator said in a filing to SGX Monday.
The company said the offer to buy back the notes was due its ongoing capital management strategy to improve its debt position and reduce negative carry. Negative carry is the cost of holding an investment is higher than its return.
Maxi-Cash added that with the notes’ maturity coming up on 27 April 2020, some noteholders, including directors and/or controlling shareholders, have expressed interest in extending their bond investment. That’s why the pawnshop operator is offering the exchange, the filing said.
“The issue of the new notes pursuant to the exchange offer would also allow Maxi-Cash to extend its debt maturity profile ahead of the maturity of the existing notes and remain well-capitalised for the next few years,” the filing said.
Certain directors and/or controlling shareholders with more than 5 percent of the notes intend to participate in the exchange, Maxi-Cash said.
Maxi-Cash said it would pay the exchange fee for noteholders participating in the exchange offer.
The offer opens 1 July and expires 12 July, Maxi-Cash said.
DBS Bank is the sole dealer manager for the offer, while Tricor Barbinder Share Registration Services is the tender and exchange agent, the filing said.
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