Sml010

[Snoopy]

SML010: bid 15.25% vs. ask 13.10%. IF Synlait cannot make progress to raise capital, its bonds would dive further quickly. Synlait needs to find $180 in 18 months to repay the bonds.

Huge volume in Synlait bonds today: $24,514,500m worth. Current yield is 57%, but that partly reflects the short time to maturity. I think I read somewhere that 57% represents about 70c in the dollar? So based on 'listing value' that $24.5145m of trades represents $24.5145m/0.7=$35m of issued bonds at the application price. So more than 1/6th of all the SML010 bonds on issue were traded today! This can't be amateurs at play. Looking at the spread of bondholders (AR2023 p142), all the bigger holdings are hiding behind custodians. So I can't tell who is selling. But someone wants a lifeboat out and they are willing to take a pretty big haircut to get away. Equally well, someone else is picking up all that hair, as they see a good 'wig making' business opportunity as December approaches. Fascinating stuff. Will those wigs be good, or is the implanted hair destined to fall out? Who ends up with their hair on at the end of the year will be interesting to see!

SNOOPY