Aspial Lifestyle Limited Announces New SGD 5-Year Senior Unsecured Notes at an IPG of 5.10%

• Aspial Lifestyle Limited (Aspial) intends to issue new SGD 5-year senior unsecured notes at an initial price guidance (IPG) of 5.10%. The notes are expected to settle on 6 October 2026 and mature on 6 October 2031, with coupons payable semi-annually. The expected issue rating is Ba1 (Moody’s), the same as Aspial’s issuer rating. Net proceeds will mainly refinance outstanding notes under the MTN Programme with the remainder for general corporate purposes.

• Aspial is a Singapore-listed consumer lifestyle and financial services group operating across retail, pawnbroking and secured lending. Pawnbroking and jewellery retail remain its established core businesses, while secured lending through BigFundr is a newer and rapidly growing business. As at 30 June 2026, the Group operated 118 stores, comprising 78 in Singapore, 24 in Malaysia and 16 in other markets.

• For 1H2026, which ended on 30 June 2026, Aspial Lifestyle's revenue rose 26.4% YoY to S$464.2 million in 1H26, while profit before tax (PBT) increased 91.8% to S$71.5 million. Retail remained the largest contributor, with revenue rising 25.2% to S$399.6 million on strong demand for gold products amid elevated gold prices.  The segment PBT surged 150.8% to S$47.1 million, lifting its PBT margin to 11.8% from 5.9%. Pawnbroking revenue increased 29.3% to S$55.3 million, while PBT rose 30.7% to S$29.0 million, implying a PBT margin of around 52.4%. Secured lending remained relatively small, contributing S$9.2 million of revenue and S$2.4 million of PBT, or around 3.4% of Group PBT, even as segment assets nearly tripled to S$499.8 million from S$169.8 million a year earlier.

• Some of the strong PBT growth came from non-operating items. Other income rose to S$10.1 million from S$2.9 million, largely due to foreign-exchange gains. This was partly offset by a S$5.2 million hedging loss on the unredeemed pledge portfolio. Aspial noted that underlying profitability would have been stronger excluding this hedging loss. Gold prices remain an important sensitivity: stronger gold prices generally support collateral values and pawn-loan quantum, while a sharp decline could reduce collateral buffers and increase potential losses on forfeited pledges.

• Pawnbroking remains a major part of Aspial’s balance sheet, with segment assets rising to S$794.1 million from S$637.0 million a year earlier. The lending is predominantly collateralised by gold, jewellery and other pledged assets, which helps mitigate potential credit losses. However, expansion of the lending books is cash intensive. Net cash used in operating activities was S$131.8 million in 1H2026 despite cash flow from operations before working-capital changes improving to S$109.7 million from S$77.5 million. The outflow was driven mainly by a S$262.4 million increase in trade and other receivables as the pawnbroking and secured-lending books expanded, rather than weaker operating profitability.

• Aspial completed an S$84.8 million equity fundraising through a private placement and preferential offering, helping lift total equity to S$445.1 million at 30 June 2026 from S$316.3 million at FY25. Total borrowings increased to S$850.9 million but reported borrowings-to-total assets improved to 45.6% from 47.8%, while net debt-to-equity declined to 1.7x from 2.1x. The capital raising therefore helped offset the impact of continued balance-sheet expansion.

• However, one thing to note is that the trade and other receivables include S$367.9 million of secured-lending receivables relating to loan notes originated through the Group’s secured lending business. The corresponding loan notes are held and administered by Aspial as agent or nominee for third-party investors, with S$361.9 million recognised as corresponding payables to those investors. These pass-through balances increase both reported assets and liabilities. Excluding the S$367.9 million of such receivables from total assets, we estimate borrowings-to-adjusted assets at around 56.9%, compared with the reported 45.6%. This is our analytical adjustment rather than a company-reported leverage ratio and provides a more conservative view of borrowings relative to assets funded for the Group’s own account.

• MTNs had a carrying value of S$179.3 million at 30 June 2026, representing around 21.1% of total borrowings, with the remainder largely comprising bank borrowings. Cash and cash equivalents stood at S$82.6 million. Aspial currently has S$53.5 million of 6.25% Series 004 notes due in September 2027 and S$128.0 million of 5.10% Series 005 notes due in October 2029 on a nominal basis. The proposed issuance should lengthen Aspial’s funding profile if proceeds are used to refinance existing MTNs, although the Group will remain dependent on continued access to bank and debt-capital-market funding as its lending businesses expand.

• The new MSFSSP 5.100% 06 Oct 2031 Corp (SGD) provides a pickup of about 298 bps against the 5-year Singapore Government Securities (SGS) yield of 2.12%. ASPL's existing MSFSSP 5.100% 29 Oct 2029 Corp (SGD) provides a pickup of about 276 bps against SGS of comparable tenor. The new issue therefore offers about 22 bps of additional spread for the extra 1.9 years of tenor.

• ValueMax Group's VMAXSP 4.000% 10 Jul 2029 Corp (SGD), rated BB by Fitch and yielding 3.90%, offers a pickup of about 193 bps against SGS of comparable tenor. On a like-for-like tenor basis, Aspial’s existing 2029 notes trade about 83 bps wider than ValueMax.

• Overall, we view the MSFSSP 5.100% 06 Oct 2031 Corp (SGD) as attractively priced. It is suitable for investors comfortable with high-yield credit exposure who are seeking steady income over a 5-year horizon. However, any tightening from the IPG to the final price guidance (FPG) would reduce both the issue yield and its spread over SGS.

Table 1: Peer Comparison