Golden Agri

Golden Agri: Different houses thoughts on the convertible bonds. CIMB thoughts: Golden Agri’s plans to issue US$400m in convertible bonds was a surprise s as the group’s current net gearing level of 13% looks manageable. As such, suspicion is that the group may be loading up for future acquisitions and expansion plans. It may also be taking advantage of the attractive rates to lock in long-term funding needs. Pending the completion of the exercise, maintain Buy and $0.92 TP. UOB Kay Hian thoughts: Maintain BUY recommendation with $0.90 TP. Believe that the CB holders are unlikely to convert into shares in the near future as the conversion premium is at 28% based on the closing price of 5 Sep 12.