Invest through M.C.B Stockbrokers Limited in Credit Linked Notes issued by CM Structured Products (1) Ltd, backed by ENL group entities2 as underlying reference entities. This opportunity offers a 4.5%3 yield and a coupon rate of 4.75% (Repo+0.75%) p.a.
1,009
MUR
Issue price / note
100
notes
Minimum subscription
4.5%
p.a.
Yield-to-put3
17 October
2024
Offer opens
27 October
2026
Next put option date
| Issue Price per Note | MUR 1,009 (inclusive of accrued interests of MUR 3.90) |
| Yield-to-put3 | 4.5% p.a. |
| Coupon rate p.a. | Repo+0.75% (currently 4.75%) |
| Interest frequency | Quarterly |
| Amount already in issue | MUR 1.3 billion |
| Amount being issued under current offer | MUR 500-700 million |
| Minimum subscription | 100 Notes |
| Next put option date | 27 October 2026 |
| Early exit option4 | Quarterly (please refer to 'Early exit limitations' under Key risks / considerations) |
Attractive yield
The Notes provide a yield of 4.5%3 p.a., representing an attractive premium over government securities of similar tenor. The coupon rate currently stands at 4.75% p.a. (Repo rate+0.75%).
Highly rated
The Notes are rated A (Outlook: Stable) by CARE Ratings (Africa) Private Limited.
Security package
The reference underlyings benefit from a security package consisting mainly of fixed charges on lands granted by ENL Limited and first rank floating charges on assets granted by ENL Property Limited.
Liquidity
Investors can sell their investments either by: (i) exercising their put option when the latter becomes available (next put option being on 27 October 2026) at a price of MUR 1,000 per Note (ii) by disposing of their Notes on the Stock Exchange of Mauritius at prevailing market prices and/or (iii) by opting for a quarterly early exit at the price stipulated in the Listing Particulars (please refer to 'Early exit limitations' under Key risks / considerations).
Credit risk of ENL entities
Investors should be aware that the notes bear the credit / default risk of the underlying reference entities, currently consisting of ENL Limited (c.75%) and ENL Property Limited (c.25%) and that the capital may be at risk in case of a default by these entities. To mitigate default risks, the Issuer only invests in A-rated instruments (or better) providing a security package. The Issuer also provides for a credit enhancement amount equivalent currently to 7.5% of the nominal amount of the Notes in issue.
Concentration risk
The Notes may not provide sufficient diversification on account of providing exposure to a single group (entities of the ENL group) and limited issuers. Investors are therefore advised not to invest 100% of their capital into the Notes.
Early exit limitations
Investors opting for an early exit will earn a lower yield and their requests may not be fully met given that the Issuer has set a maximum limit of 5% of outstanding notes per quarter to meet early exit requests. Similarly, investors may not be able to exit early in case the Issuer reaches the set limit of 20% of outstanding notes over any given period.
| Offer opening date | 17 October 2024 |
| Offer closing date | 15 November 2024 |
| Settlement date | 21 November 2024 |
| Issue, Interest Start and First Trading date | 27 November 2024 |
1 Return expressed as the yield-to-put. Current coupon rate is 4.75% p.a.
2 The yield is calculated based on an issue price of MUR 1,009 (inclusive of accrued interests of MUR 3.90 per note), coupon rate of 4.75% p.a. and a holding period of around 23 months to the next available put option of 27 October 2026.
3 CM Structured Products (1) Ltd invests in notes issued by selected entities of the ENL group of companies.
4 The yield to the investor will be lower than 4.5% p.a. in case of an early exit. Early exit prices and mechanism are provided in the Listing Particulars and are subject to limitations.
How to subscribe?
Prospective Investors can apply for the shares online at invest.mcbcapitalmarkets.mu.
Eligibility to subscribe digitally
Only selected individual applicants can apply online. Other investors (joint, minors, corporate bodies and institutional applicants should use the Manual subscription option to subscribe manually). You may be required to produce in person your original NIC, proof of bank account and KYC documents for identity and account confirmation.
Prospective Investors opting for a manual application should fill in and sign the Application Form, provided in the Prospectus. The Application Form must be returned with the payment instruction and should reach M.C.B. Stockbrokers Limited or not later than 3:00 pm on 15 November 2024.
Resources
Notes:
(1) Independent valuation performed by KPMG Advisory Services Ltd determined the equity value of EMTEL as MUR 12.028bn.
(2) A cash dividend of MUR 130 million has been paid in calendar year 2024. Subject to the continued satisfactory performance of the business, the Board of EMTEL expects to declare additional cash dividends of MUR 570 million in 2024.
Disclaimer
M.C.B Stockbrokers Limited (“MCBSB”) holds an investment dealer (full service dealer including underwriting) licence from the Financial Services Commission (Licence No. IP14000001). MCBSB issues from time to time publications on specific companies, groups or sectors. Our publications should not be construed as offers or solicitations to buy or sell securities. The information contained herein have been compiled or arrived at by MCBSB from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. All the information in this document remains subject to qualifications, conditions or more detailed description set out under the offer documents relating to the offer. Any forecast or projections are also subject to further information detailed in the offer documents. It remains the recipient’s sole responsibility to ensure that they have read and understood the terms and conditions of the offer. The recipients are advised to seek professional advice prior to making any investment decision. This document has been provided solely for the assistance of recipients but should not be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. Neither MCBSB, nor any of its director, officer or employee, accepts any liability whatsoever for any direct or consequential loss arising from any use of our publications. Furthermore, our publications may not be reproduced, distributed or published in whole or in part for any purpose, unless prior authorisation is obtained from MCBSB. This document remains subject to the legal notices and disclaimers found on our website: https://mcbcapitalmarkets.mu/legal-notice.