Ezion

Ezion: has issued an unsecured $110m 6-yr bullet bond at 4.7% coupon rate. US$60m or ~70% of the proceeds would be used to fund a new project, service rig 27. The rig has secured a letter of intent (LOI) worth US$80.3m over four years. It is expected to be deployed in South East Asian waters by end-2013 CIMB note that this project, which is funded entirely by the bullet bond, is the most value-enhancing for equity holders, and more significantly, the fact that the principal would only be repaid at maturity means that Ezion can reinvest cash flow generated from the project instead of repaying the debt progressively. Overall, house conclude that there are still legs in the stock. As the first and largest provider of liftboats in Asia-Pacific, Ezion is in Blue Ocean. Combine this with management’s financial savvy and growing track record and traction among national oil companies, Ezion’s order momentum should surpass that of 2012. House maintains O/p with $2.55 TP.