Swiber defaults on bond payment again

Beleaguered oil field services firm Swiber Holdings has defaulted on a coupon payment due yesterday for its 450 million yuan (S$92.3 million) fixed-rate notes - the second bond payment it has defaulted on since its judicial management application in July.

According to the judicial managers' report earlier this month, Swiber has US$258.6 million (S$354 million) outstanding as of July 31 on three notes under a $1 billion multi-currency medium-term programme.

One of these three is the 450 million yuan note, on which Swiber had a 17.44 million yuan coupon payment due yesterday, according to court papers.

More bond coupon payments are looming next month under the multi-currency medium-term programme. A coupon payment of $5.7 million under a $160 million note is due on Oct 18 and another $100 million note, together with its final coupon payment, is due for redemption on Oct 10.

Swiber roiled the local bond market last month after it defaulted on a $4.88 million coupon payment that came due on Aug 2 on a $150 million sukuk note. This was part of a US$500 million multi-currency Islamic Trust certificate issuance programme.

According to the judicial managers' report, the notes payables are unsecured.

Another $50 million sukuk note is due in October next year under the US$500 million programme.

Meanwhile, claims against Swiber rose to US$231.4 million as of Sept 15, up from US$230.7 million a week ago.

"The company is currently seeking legal advice on the above claims," said Swiber's interim judicial managers in a filing to the Singapore Exchange last Friday.

Several sectors are vulnerable to rising financial strain, S&P Global Ratings analyst Bertrand Jabouley warned in a report. "The oil services sector remains the most vulnerable, as challenging markets and declining earnings coincide with high legacy debt levels and growing refinancing requirements."

Swiber is the largest local offshore firm to fall victim to the ongoing oil rout and macro-economic uncertainties, which contributed to the slowdown in the oil and gas exploration and production sector that the company services.

As of Sept 15, S&P Global estimated listed entities in Singapore have $60 billion in bonds outstanding.


This article was first published on September 19, 2016.
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