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Tuesday, April 9, 2019

Another Bad Deal - Merger of OUE Commercial REIT & OUE Hospitality Trust

An announcement was recently made on the merger of OUE Commercial REIT and OUE Hospitality Trust. I took a look and realized how the merger is a bad deal for both the existing shareholders. In addition, this happened after the OUE Commercial REIT rights issue less than a year ago - OUE Commercial REIT Rights Issue - Very Very Very Bad Deal which meant a double blow for OUE Commercial REIT shareholders.


OUE Hospitality Trust shareholders will be receiving $0.04075 cash + 1.3583 new OUE Commercial REIT shares for every existing OUE Hospitality Trust share. Let's look at the numbers to see why I deemed it as a bad deal.

OUE Hospitality Trust (Before Merger)

Numbers from OUE Hospitality Trust 2018 Annual Report
Last Close: $0.735
NAV: $0.75
PB: 0.980
DPU: 0.0499
Dividend Yield: 6.79%

OUE Commercial REIT (Before Merger)


Last Close: $0.52
NAV: $0.71
PB: 0.732
DPU: 0.0348
Dividend Yield: 6.69%

After Merger

Pro Forma DPU
Pro Forma NAV
Pro Forma Aggregate Leverage
You can see that the pro forma numbers are based on the issue price of $0.57 per new OUE Commercial REIT share.

Issue Price: $0.57
NAV: $0.62
PB: 0.919
DPU: 0.0348
Dividend Yield: 6.11%

What this means for OUE Hospitality Trust shareholders:
- The "buyout" is at below book value/NAV
- You got diluted/the dividend yield drops for the "same" investment

What this means for OUE Commercial REIT shareholders:
- You got diluted big time as the NAV decreases by ~12.7%
- The pro forma DPU shows an increase of 0.0341 to 0.0348 but 0.0341 is not the actual DPU for FY 2018. Unable to determine if it is truly yield accretive as stated
- Increase in gearing/leverage
- Potential decrease in price because OUE Commercial REIT has almost never traded near book value/NAV. Using the pro forma NAV of $0.62 and assuming it trades around 0.8 PB (giving it a little premium due to larger and more diversified assets base), the share price will be around $0.496


Having said that, if you think otherwise and believe that the price of OUE Commercial REIT will increase after the merger. Then there exists an opportunity for you to arbitrage by buying OUE Hospitality Trust share. You can use this spreadsheet for your analysis - Merger of OUE Commercial REIT & OUE Hospitality Trust

We will be staying away. Hope this short analysis will help all the current/future shareholders!

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Monday, April 8, 2019

Honeymoon to the United States - 5 Days 4 Nights in Las Vegas and Grand Canyon

Continued from our previous post - Honeymoon to the United States - 3 Days 2 Nights in Los Angeles and finally, we have reached the final part to our honeymoon, Las Vegas and Grand Canyon!

Day 12
Expectation:
8:00AM: Drive down to Las Vegas
2:00PM: Visit Las Vegas casinos along the Strip
6:00PM: Visit Hell's Kitchen, Las Vegas

Reality:


Las Vegas is approximately 435km away from Los Angeles. We checked out of our hotel in Los Angeles at around 10am and it took us 5 hours to reach Westgate Las Vegas Resort & Casino, our hotel at Vegas. Our accommodation at Vegas is probably the cheapest among all our stays in the US - we managed to get it at around USD 60 per night, including resort fee. It does not come with free breakfast but at least there was free parking! Westgate Las Vegas Resort & Casino is not located along the Strip, but it was a relatively short drive to the Strip (took approximately only 15-20 mins only).


I thought I had it all planned out for the night - I had made a reservation back in Singapore to have dinner at Hell's Kitchen Vegas, but to my horror, I realized I booked it with the wrong date! I was so devastated about it but KPO managed to make another booking on our last night in the US.

As a result, we decided to explore the casinos/hotels along the Strip and have our dinner there. We realized that the Venetian was one of the few hotels along the Strip that has free parking (including free valet services) and decided to head there. Saw many good reviews on Grand Lux Cafe in Venetian and decided to head there for dinner. Turned out to be a great decision as the food was good and the service was impeccable too! Some of the food pictures below.


B.B.Q. Chicken Rustic Pizza

Some chicken

Deep Dark Fudge Cake

Day 13
Expectation:
8:00AM Drive to Grand Canyon Skywalk & Eagle Point
12:00PM Visit the Grand Canyon Skywalk
3:00PM Drive to Best Western Premier Grand Canyon
8:00PM Visit Yavapai Point for stargazing

Reality:


Grand Canyon seemed quite small on Google Map (or so I thought). I thought we could complete all the must-see attractions in two days but the drive seemed never-ending. We started by driving to the Grand Canyon Skywalk, which is one of the nearest attraction to Vegas (approximately two-hour drive away). It turned out that we could not drive to the Grand Canyon Skywalk at Eagle Point directly. Instead, we were directed to park at an open car park on our way there, and we had to purchase the $79 ticket per pax which entitled us to take the shuttle bus and visit the Skywalk. We felt that it was kind of pricey but decided to continue since we were already there. To enter the Skywalk, we had to wear some fabric on our shoes to prevent scratching the surface. Personally, we both felt that the view was nice, but will I pay $79 for it or recommend it? Probably not. There are cheaper ways to see similar scenery from within the national park where the entrance fee (7 days pass) is just $35 per car.


I realized I miscalculated (and grossly underestimated) the time we need to reach our hotel, which was another 300+km away from the Skywalk. So after we visited the place, we had to hurry up in order to reach the hotel before the sky darkens.

We ultimately arrived at our hotel, Best Western Premier Grand Canyon Squire Inn at around 7pm. By the time we arrived, it was starting to freeze (below zero degrees!). FYI, the weather at Grand Canyon is like a desert, it can get really hot in the day and crazy cold at night. So remember to pack and dress in layers when you visit.

We chose Best Western because it was very near our next activity - stargazing at Yavapai point, which is located at around 15 mins drive away. We both developed a love for stargazing ever since we visited Lake Tekapo in New Zealand when I was on my graduation trip. We could literally see the milky way at Lake Tekapo and since then, we have been in search for a stargazing spot which can match or surpass Lake Tekapo. Yavapai Point was actually not too bad. We could literally see the sky filled with stars, though we could only see a very faint white spot in the sky which we guessed could be the milky way. We stayed there in the cold for about 30 mins before heading back to the hotel to warm ourselves up and get an early rest.

Day 14
Expectation:
6:00AM Drive to Antelope Canyon Tour
9:00AM Antelope Canyon


We woke up crazy early the next day because we had an Antelope Canyon Tour the next day at 9am and the Tour is approximately 220km (approximately 2.5hrs) away + there is a time difference of an hour which we almost failed to account for! So we had to wake up at 5am to pack and check out our hotel at 6am continue our drive. Fortunately, we made it in time.

We reached a small town where the tour agency was located and they have some lorries to bring the visitors to the actual location which was located about 20 mins drive away. The lorries drove off road into the sandy floor in the Canyon and most of the time I had to keep my eyes closed so that the sand does not enter into my eyes.


When we finally reached Antelope Canyon, I was in awe. The Windows Desktop wallpaper was literally right in front of me. It was huge and we were simply amazed at how erosion from flash flood could form such a majestic art piece. For anyone who is visiting Grand Canyon, you have to definitely visit this place!

The guide told us to add some filter

Without filter

The tour ended at around 11am, and we decided to head to the famous Horseshoe Bend which was just a 30 min drive away. The view was absolutely gorgeous as well, more importantly it is free! *screams with joy* We see many crazy people there who actually climbed beyond the fences/barricades to take pictures. Seriously, aren't your lives more important than some Insta-worthy shots?! We took some shots behind the fences, and I think they look beautiful as well!


That pretty much sums up our adventure at the Grand Canyon. A word of advice for anyone who intends to visit this beautiful national park: please leave aside at least 3 full days, unless you are okay with waking up at 5am to drive nonstop like us.

It was another long way back to Vegas - approximately 447km away. Halfway along the journey, we passed by a Walmart Superstore and decided to buy a cheap pizza for dinner there for just $5! Yes, a whole pizza for $5! It was not nice at all though, I guess you get what you pay for...


We were looking forward to the "special" treatment/check-in process but was so disappointed with the experience. We went into the Diamond Lounge and there was only 1 staff who was already serving a disputive customer. We waited for around 10 minutes and there was still no one to attend to us so we went back to the main lobby and proceed to check in immediately. KPO tried to get the resort fee waived by saying that we do not need the facilities and wireless internet access but was unsuccessful.

Day 15
Expectation:
Nothing much, just OTOT (Own Time Own Target)

So thankful that we have decided to be less ambitious on the last day and simply do nothing. We decided to have a hearty breakfast at the nearby The Egg and I after reading many positive online reviews about it.



It was really good, and the service was impeccable as well. Sorry couldn't remember what I ordered as I have procrastinated on this blogpost for so long, but you can easily find food recommendations online. After that, we visited the Las Vegas North Premium Outlets to do our last minute shopping for our family.



We ended the day by visiting the famous Hell's Kitchen which I missed on the first day in Las Vegas. So glad that we managed to secure a booking because by the time we reached around 5pm, we saw a long queue outside the restaurant. The Hell's Kitchen was decorated the exact same way as what was shown on TV - the burning flames outside the restaurant, the blue and red teams, the shouting in the kitchen, etc. Even the menu is the same! There's the beef wellington, the risotto, etc. And most importantly, we both enjoyed the food there. Highly recommend it to anyone visiting Vegas!


Beef Wellington

Lobster Risotto
After dinner, we went to watch the Bellagio Fountain Show and walked around the Vegas Strip.


Once back at Westgate Las Vegas Resort, we decided to splurge whatever leftover money we have in the casino, hoping to recoup some of our expenses. We were so wrong. We ended up spending all of our remaining money (which thankfully isn't a lot left) at the casino.

Day 16
Emotional day as we packed up to catch the flight early in the morning back to Singapore (unearthly hour at 4.30am again!), this time on Economy class instead of First class... The only thing to look forward to is our 8 hours layover at Haneda airport in Tokyo which could allow us to eat some Ichiran Ramen and Japanese dessert at Shiseido Parlour Salon De Cafe in Ginza before heading back to Singapore.


Shiseido Parlour Salon De Cafe. Atas and overprice...

All in all, this is definitely not the usual honeymoon that couples do, and also one of the most exhausting trips for us too. However, I still loved it as we managed to cover many areas and most of what we had planned out to do. Hopefully, this can help other people in their US itinerary planning too!

Till our next adventure!

You might be interested in these blog posts too:
Honeymoon to the United States - 3 Days 2 Nights in Los Angeles
Honeymoon to the United States - 2 Days 2 Nights in Silicon Valley and Cambria
Honeymoon to the United States - 3 Days 2 Nights in Yosemite
Honeymoon to the United States - 2 Days 2 Nights in San Francisco
Honeymoon to the United States - 3 Days 2 Nights in New York
Honeymoon to the United States - Total Expenses
Honeymoon to the United States - Renting a $275,888 Mercedes Benz Convertible with Hertz
Singapore Airlines Suites Experience - SQ26 Singapore to New York
Singapore Airlines Suites Experience - The Private Room
Redeeming KrisFlyer Miles for Singapore Airlines Suites = 38.6% Cashback!

Do like any of the following for the latest update/post!
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2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Friday, April 5, 2019

KPO's Credit Report by Credit Bureau Singapore

This is one of the many posts that was sitting in draft mode for a long long time.

Taken from Credit Bureau Singapore - What Is A Credit Score?
Firstly, what is a credit score? It is a number used by lenders as an indicator of how likely an individual is to repay his debts and the probability of going into default. It is an independent assessment of the individual's risk as a credit applicant. This will affect your credit card application, mortgage/home loan, etc. You can refer to the detailed explanation from our Credit Bureau.

Next, how do I find out what's my score? You will need a credit report and there are 2 ways to get it: You can either purchase your report at a price of $6.42 inclusive of GST or you can get a free credit report whenever you apply for a credit card. Interesting old (2015) statistic - Of the 870,766 consumers who applied for a new credit facility in 2015, 85 per cent have never seen their personal credit files, said CBS. Source: Free credit report when you apply for a loan, credit card or overdraft

I applied for another credit card (UOB PRVI Visa) back in January when SingSaver was having the Air Miles vs Cash Back "competition". Needless to say, Air Miles won the competition and we all had $30 more cash on top of the existing signup bonus :) Ops, I digress. The credit card application gave me free access to my credit report which I will be sharing below.

KPO's Credit Report


I have 24 accounts?! Unfortunately, the report does not include a breakdown of these accounts so my guess would be all the credit cards (including terminated ones) + loans. Miles game is tough - I always tell people I have > 10 credit cards and if you want a simple 1 credit card kind of life, it is definitely not suitable for you.

The $100k secured credit comes from my pledged shares to SCB at 70% LTV (loan to value) which I blogged about here - Leverage - A Double-Edged Sword.

The unsecured credit limit is simply the total limit of all my credit cards.


I have a longer account history but you will get the point of it with the above screenshot. This shows the transactions/activity of all your account/credit card/loan for the last 3 years. I shall not go into details what the various alphabet stands for.


This shows you the history of banks enquiring your credit report from the Credit Bureau. You can see that the banks do conduct a regular/yearly review on one's credit score too.


Here comes the grand finale - KPO has a credit score of 1956 (grade - AA) and a probability of default at 0.14%. The report also provided some factors/reasons why KPO does not has a perfect score with 0% probability of default:
1. Immature Credit History - My earliest known credit account was back in 2014 (age 24) when I was still in university and I still remembered it was the Citi Clear Student Card. My first credit card was a cash back card. lol. Anyway, I still do not understand why people would use a debit card over a credit card.
2. Credit Exposure - I supposed this is referring to the total secured and unsecured credit limit which is > $250k? Definitely looks impossible to repay all of them if I were to go crazy one day and utilize all of them. No! I will not sell our shares/investment. lol.
3. Too Many Enquiries - I will cancel cards that I do not use after 6 months and then reapply when there are cash incentive/attractive signup bonus + all the reviews the banks will be conducting. My credit score will never be perfect!

The above are just specific to me so it will probably be different or have some similarity with yours.

Fun fact - statistics for consumers in my age group (21-29)
To be honest, I find the above pretty surprising or should I say shocking?? Credit card and housing loan look pretty normal but not for the other two. It seems that majority of the people (>86%) have taken some form of personal loan and >88% of the people have a motor vehicles loan?? Note that the above statistics are for my age group, so I was not expecting the majority of the people who have work less than 5-10 years to be buying a car.

On a side note, this is my last year in this age group, not sure if I should be sad or happy about it. Shall share the next age group when I have the chance next time. lol.

What are you waiting for? Go check yours out!

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)