Asian Pay TV Trust: Why I think It's Debt Is Manageable, Interest Cost and It's 13% Dividend Yield

Asian Pay TV Trust (APTT) is a stock I am looking at. This is because its debt profile seems manageable for now. For starters below is the debt profile of the trust:

Onshore Taiwan Debt: SGD$1.12 billion, Offshore Debt: SGD$87 million

Total Debt: $1,209 million

Onshore Taiwan Debt Interest, Taiwan Interbank (Taibor) : 2.1% 

Singapore Debt Interest: 7.7% 

CEO Talk

In the latest CEO update, he says APTT is trying to bring all its offshore debt to Taiwan and its not hard to see why. The cost of borrowing in Singapore is 3 times the cost of Taiwan!

With a promise of bringing the Singapore debt back to Taiwan in mid 2025 and with constant debt repayment by APTT, I do expect an amount of SGD$50 million will be returned to Taiwan.

In addition, while APTT has successfully hedged its Taiwan debt at 0.94% interest, it expires when its debt is refinanced in mid 2025. The current TAIBOR rate is 1.35% and I expect it to remain there. As for the refinancing, I think the eventual margin APTT will pay for all its debts is TAIBOR + 2%. This means an effective interest rate of 3.35%. Hence, I do expect APTT interest expense to rise by 3.4% next year.

Debt Repayment

However, the good news is APTT plans to pay down SGD$40 million in debt from its $1,209 million debt. This means a decrease of 3.3%. Factoring the decrease in debts and higher interest cost, 2025's interest expense will remain similar to 2024's.

Debt Management

APTT's debt is due for refinancing next year end.

With ability to service its debt interest and paying off some of its principal, I think its Taiwanese banker will refinance. Expected debt to ebidta is 9 times which should be okay 

Cashflow and Dividend

With only 30% of its free cash given as dividends currently, APTT has the capacity to continue giving 1.05 cents dividend every year, this despite the decline in cable TV business.

Therefore, I am confident APTT will be a dividend giant giving 1.05 cents annual dividend. Investors can use this parameter to judge how much should they pay to get an APTT share.

For me, I have added more share of APTT, a purchase of about 190,000 shares. This brings my holdings to 880,000+ shares. APTT will be a cornerstone in my dividend portfolio.