Month: January 2008
Cambridge – SGX
Cambridge Industrial Trust Management Limited (the “Manager”), the Manager of Cambridge Industrial Trust (“CIT”), is pleased to announce that CIT’s trustee, on behalf of CIT, has entered into a facility agreement with the Hongkong and Shanghai Banking Corporation Limited (“HSBC”) for a revolving credit facility (the “Revolving Facility”) up to an aggregate of S$100 million. The Revolving Facility has a term of two years.
Interest payable on the Revolving Facility will be a margin above the Singapore Dollar Swap Offered Rate (“SOR”) with interest periods of one, two, three or six months at the option of CIT.
Mr Ang Poh Seong, Chief Executive Officer of the Manager, said “We are delighted to have concluded this debt transaction. This facility provides CIT with the capital to continue its track record of accretive acquisitions.
“The terms and pricing of this facility demonstrate the success of CIT’s prudent capital management strategy and the benefits of pursuing multiple sources of funding to mitigate the risk of capital market disruption”.
The facility is secured by the six properties in Singapore acquired by CIT in its successful October 2007 Equity Fund Raising, namely:
• 1 Tuas Avenue 3
• 7 Ubi Close
• 9 Bukit Batok Street 22
• 120 Pioneer Road
• 120 Strata Units in 48 Toh Guan Road East, Enterprise Hub
• 23 Woodlands Terrace
The facility will be used to fund the acquisition of future properties for CIT, including the two properties currently under option, namely 6 Tuas Bay Walk and 21B Senoko Loop , as well as for working capital purposes.
The facility is in addition to CIT’s existing debt facilities, which are a revolving term loan facility of S$390 million provided by Orchid Funding (Singapore) Limited and an overdraft facility of S$10 million provided by ABN AMRO Bank N.V., Singapore Branch. The Manager’s intention in the medium term is to refinance both the existing facilities and the Revolving Facility with a Commercial Mortgage Backed Securities program (“CMBS”) or other long term financing structure, subject to market conditions.
Standard and Poor’s Ratings Services affirmed CIT’s ‘BBB-‘ credit rating on 12 December 2007, and upgraded their outlook from “Neutral” to “Positive”.
MapleTree – BT
MapletreeLog buys warehouse in S Korea
MAPLETREE Logistics Trust (MapletreeLog) yesterday said it has agreed to acquire a warehouse in South Korea for 11.6 billion won (S$17.7 million), which will add 0.02 Singapore cents to its pro-forma distribution per unit.
The property is a two-storey warehouse/ distribution centre located in the established logistics cluster of Kyungki. It has a temperature-controlled section and a three-storey office building. Valued at 13.5 billion won, the property is located on freehold land, with a GFA of about 10,911 sq m.
The vendor of the property is Oakline Co, which will lease back the property for a period of four years. MapletreeLog intends to fund the acquisition wholly by debt, but does not rule out alternative means of funding as well.
‘We are very pleased with our first acquisition in South Korea as we continue to expand our footprint in Asia, diversifying our revenue streams across various countries,’ said Chua Tiow Chye, CEO of Mapletree Logistics Trust Management, which manages the trust. ‘This will be the sixth Asian market which MapletreeLog will have assets in.’ Mr Chua added that MapletreeLog will continue to grow its presence in the South Korean logistics real estate sector, seeing that it is a relatively well-developed market.
MMP – SGX
CLARIFICATION OF BLOOMBERG AND OTHER PRESS REPORTS DATED 8 JANUARY 2008
Macquarie Pacific Star Prime REIT Management Limited (the “Manager”), as Manager of Macquarie MEAG Prime Real Estate Investment Trust (“MMP REIT”), wishes to clarify statements made in reports published by Bloomberg, Business Times and various other press sources today (the “Reports”).
The Manager is always evaluating sources of funding and other means of effective capital management for MMP REIT. Reference should be made to the SGX-ST announcement released by the Manager on SGXNET today in respect of the medium term note programme (the “MTN Programme”) established for and on behalf of MMP REIT. Whilst the Manager is considering raising debt capital for MMP REIT in the near future (which may be by way of a bond issuance, in conjunction with the MTN Programme or otherwise), no definitive agreements or terms have yet been finalised, in the manner the Reports would suggest or otherwise.
In the event of any material developments in this respect, the Manager would issue the appropriate announcements in compliance with the listing rules of the SGX-ST.
Source : SGX
MMP – BT
Macquarie MEAG to raise S$150m from bond sale
Trust is acquiring more property assets in Asia
MACQUARIE MEAG Prime Reit, which owns stakes in two Singapore downtown malls, plans to raise as much as S$150 million from a bond sale, according to an e-mail sent to investors.
The property trust, which also owns offices in the city-state, hired Citigroup Inc to arrange the sale. Macquarie MEAG is offering investors yield premiums of 30 basis points more than corporate benchmark borrowing rates in Singapore for bonds that mature in a year, and 70 basis points for three-year securities. A basis point is 0.01 percentage point.
Macquarie MEAG is raising more debt as it acquires more property assets in Asia. Its leverage increased to about 34 per cent as of Sept 30, from 25 per cent at the end of 2006, according to the trust.
The Singapore-listed trust owns office buildings and retail malls in Singapore, Tokyo and Chengdu, China.
Macquarie MEAG will likely buy assets similar to those it is holding, which may raise its leverage to between 40 to 45 per cent, according to Moody’s Investors Service on May 14.
The trust is rated Baa1, the third-lowest investment grade, by the credit assessor.
Macquarie MEAG owns 74 per cent of Wisma Atria, whose tenants include the Isetan department store, and 27 per cent of Ngee Ann City, anchored by retailer Takashimaya.
The trust is managed by Macquarie Pacific Star Prime Reit Management Ltd, which is 50 per cent-owned by Macquarie Group Ltd, Australia’s largest securities firm. — Bloomberg
MapleTree – OCBC
For higher-risk appetite investors
Cash call as expected. In our Dec 2007 report on Mapletree Logistics Trust (MLT), we articulated that MLT was likely to raise fresh equity within the next two quarters. This was based on the assumption that MLT’s gearing would breach the 60% allowable limit if all its recently announced acquisitions would be debt funded. Indeed, MLT has recently announced that it is seeking fresh equity of S$400m to S$500m via a rights issue. We estimate that if the proposed right goes through successfully, MLT’s gearing would fall to a more acceptable level of about 40%.
Some uncertainties. In the current climate of market volatility and sub prime woes, cash calls are unlikely to be well received. This is clearly reflected by a REIT’s recent cash call in the market which had to be priced much lower than expected. Furthermore, unlike other REITs which acquire assets conditional on successfully raising fresh equity, MLT’s financing model works on the basis of “buy now with debt and refinance later with equity”. This model has two weaknesses in that it exposes MLT to the volatility of the capital markets, and secondly as cash call is delayed until gearing limit is reached, it does not leave much room for maneuvering. In other words, MLT is totally exposed to the demands of the capital markets.
Parent underwriting the rights. The key issue is the pricing of the rights. Obviously the lower the price, more units will be issued and hence the dilutive impact would be greater. The good news is that in the case of MLT’s rights, its parent Mapletree Investment Pte Ltd (MIPL) has agreed to underwrite the issue by buying up all unsubscribed rights. This in turn should help support pricing of the rights and hopefully not lead to DPU dilution.
BUY, but for higher-risk appetite investors only. In the current uncertain capital market climate, it may be better to be less dependent on the capital markets. In that context, a more conservative growth strategy is perhaps more appropriate. As we had articulated in our 2008 sector report, the industrial sector is not our choice sector as we see many risk factors. However, corporate development could possibly be a catalyst to MLT’s unit performance. Nevertheless, we emphasize that MLT is meant only for investors with higher-risk appetite and longer investment horizon. We maintain BUY with a fair value of S$1.31.