Cambridge – SGX
PRESS RELEASE
CAMBRIDGE INDUSTRIAL TRUST TO REFINANCE WITH S$390.1 MILLION TERM LOAN
Coordinating Lead Arrangers : The Hongkong and Shanghai Banking Corporation Limited; nabCapital, a division of National Australia Bank; and The Royal Bank of Scotland plc
Tenor : 3 years from drawdown
Loan: S$390.1m syndicated term loan, fully funded by the Coordinating Lead Arrangers. Completion of the Loan is subject to standard documentation. A portion of the Loan is subject to syndication on normal market conditions.
Effective Interest Rate: 6.6% per annum (approximately), including amortisation of upfront costs.
DPU Impact: CITM anticipates that CIT’s distribution in 2009 will be reduced by approximately 0.9 cents per unit per annum(1). (1) Note that amortisation of upfront costs does not affect the level of distributions to unitholders.
Properties mortgaged: CIT’s existing property portfolio excluding 16 Tuas Avenue 18A
Mr Chris Calvert, CEO of CITM said, “We are addressing the short-term refinancing risk that has been affecting CIT.
“Investors in CIT now have a highly stable income stream, driven by CIT’s long average lease term and high level of tenant security deposits, and following successful completion of the new loan facility, will be coupled with three years of debt financing. Given the current economic climate, this will be a welcomed position.”
Commenting upon the refinancing, Dr Chua Yong Hai, the Chairman of CITM said, “In the current economic circumstances it is pleasing to note that CIT has been able to retain the support of its existing lenders, HSBC and RBS. It is also pleasing that the National Australia Bank – through nabCapital, its institutional banking and capital markets business – has become a lender, adding to the role its nabInvest business has taken as a shareholder in the REIT’s manager. This is an excellent demonstration to REIT investors of the importance of strong sponsorship,” says Dr Chua.
Standard and Poor’s Ratings Services affirmed CIT’s ‘BBB-‘ credit rating on 6 October 2008.
CITM has decided to refinance using conventional debt, in lieu of a Shariah compliant facility. The Board recognises the strategic importance and potential benefits to CIT of becoming Shariah compliant and will continue to investigate whether this direction is in the best interest of unitholders in the medium term.
In terms of forward commitments that may have required debt funding, CIT has reached agreement with the seller of 29 Tai Seng Avenue to extend the option agreement to 30 June 2009 (or such other mutually agreeable date) and the completion is subject to market conditions having supported an equity fund raising by CIT. CIT has reached agreement with the seller of 75 Tuas Avenue to terminate the option agreement relating to that property.