Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

We are launching coverage of debt tokens with <a href="https://www.smartkarma.com/entities/siri-hub-investment-digital-tokens" target="_blank" data-smartkarma-citation="entities:33515:1" rel="noopener">Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)</a> (SIRIHUB), Thailand’s first investment token. This report is a pre-launch report and we note that Thailand’s Securities Exchange Commission (SEC) is in the process of reviewing the launch at the time of this report. We understand XSpring Digital (formerly called SE Digital), SIRIHUB’s underwriter, has filed for SEC’s approval for the token launch since 5-May and the SEC has up to 90 days to assess the proposal. As such, we expect the SEC’s decision by 5-August.Our conversation with the SEC on 29-June leads us to believe XSpring Digital will need to revise its token prospectus in July. That said, we do not expect the token to be launched until August. We reached out to XSpring Digital to get our initial questions answered but so far the company has not replied to us. Although the sale is not finalized yet, we believe it is of investor interest to understand the proposed structure of SIRIHUB to react in time when the token is up for sale.Our initial thought on the token is that SIRIHUB-A at up to 4.5% dividend yield is unattractive, compared to <a href="https://www.smartkarma.com/entities/sansiri-public-co-ltd" target="_blank" data-smartkarma-citation="entities:12201:1" rel="noopener">Sansiri Public (SIRI TB)</a> (Sansiri)’s 4-year THB bond yield which hovers in the mid 4% handle at the time of this report. That said, SIRIHUB-B at up to 8.25% dividend yield is a much better choice, in our view, although SIRIHUB-B takes structural subordination to SIRIHUB-A. SIRIHUB-B is a better carry at 8.25% dividend yield (than SIRIHUB-A’s). Sansiri is rated “BBB+” by TRIS Rating. Assuming a one-notch lower rating for SIRIHUB-B at “BBB” on a national scale, SIRIHUB-B’s international scale rating could be in the “B” or “B-“ category. At a “B” credit rating on an international scale, we believe investors can still find 4-year Asian USD bonds with a yield-to-worst of more than an 8.25% handle.Overall, we believe the upside of both tokens is rather limited by (1) the value of Siri Campus which could be lower than THB2.4bn now on COVID-19; (2) a lack of income diversification; and (3) a lack of liquidity as Thailand’s first debt token. That said, we see both SIRIHUB-A and SIRIHUB-B as unattractive at the current offering despite the better carry for SIRIHUB-B.

We are launching coverage of debt tokens with Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY) (SIRIHUB), Thailand’s first investment token. This report is a pre-launch report and we note that Thailand’s Securities Exchange Commission (SEC) is in the process of reviewing the launch at the time of this report. We understand XSpring Digital (formerly called SE Digital), SIRIHUB’s underwriter, has filed for SEC’s approval for the token launch since 5-May and the SEC has up to 90 days to assess the proposal. As such, we expect the SEC’s decision by 5-August.Our conversation with the SEC on 29-June leads us to believe XSpring Digital will need to revise its token prospectus in July. That said, we do not expect the token to be launched until August. We reached out to XSpring Digital to get our initial questions answered but so far the company has not replied to us. Although the sale is not finalized yet, we believe it is of investor interest to understand the proposed structure of SIRIHUB to react in time when the token is up for sale.Our initial thought on the token is that SIRIHUB-A at up to 4.5% dividend yield is unattractive, compared to Sansiri Public (SIRI TB) (Sansiri)’s 4-year THB bond yield which hovers in the mid 4% handle at the time of this report. That said, SIRIHUB-B at up to 8.25% dividend yield is a much better choice, in our view, although SIRIHUB-B takes structural subordination to SIRIHUB-A. SIRIHUB-B is a better carry at 8.25% dividend yield (than SIRIHUB-A’s). Sansiri is rated “BBB+” by TRIS Rating. Assuming a one-notch lower rating for SIRIHUB-B at “BBB” on a national scale, SIRIHUB-B’s international scale rating could be in the “B” or “B-“ category. At a “B” credit rating on an international scale, we believe investors can still find 4-year Asian USD bonds with a yield-to-worst of more than an 8.25% handle.Overall, we believe the upside of both tokens is rather limited by (1) the value of Siri Campus which could be lower than THB2.4bn now on COVID-19; (2) a lack of income diversification; and (3) a lack of liquidity as Thailand’s first debt token. That said, we see both SIRIHUB-A and SIRIHUB-B as unattractive at the current offering despite the better carry for SIRIHUB-B.

SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token

Thailand

SPV77, a special purpose entity set up to issue and offer Siri Hub Investment Digital Tokens (SIRIHUB) with a four-year maturity to investors, serves as the token issuer.

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SPV77 (SPV TB)

SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token

Thailand's first debt token is under SEC review. See how the token is structured, how the story came together, and whether "SIRIHUB" is investable.

Bondcritic

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