CapitaCommercial Trust (CCT) on Tuesday said it has entered into a facility agreement with DBS Bank, Standard Chartered Bank, United Overseas Bank Limited and The Bank of Tokyo-Mitsubishi UFJ to secure a three-year term loan of up to S$580 million.

The term loan will be drawn down in March 2009 to refinance the borrowings under the S$580 million commercial mortgage-backed securities (CMBS), the property trust said.

In addition, the trust’s manager has decided to abort the redevelopment of Market Street car park into a Grade A office and commercial building. Although the manager said in April 2008 that the decision on the planned redevelopment would be made only after mid-2009, after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, the manager has decided to abort the project immediately, CCT said today.

The CMBS is secured by seven properties of CCT – Capital Tower, 6 Battery Road, Robinson Point, Starhub Centre, Bugis Village, Golden Shoe Car Park and Market Street Car Park. However, the term loan will only be secured by a mortgage and other securities relating to Capital Tower, CCT said.

‘We have always adopted a proactive approach for our capital management strategy and we are pleased to secure the banks’ commitment for the refinancing in advance of the debt maturing in March 2009,’ said Lynette Leong, chief executive of the trust’s manager.

‘We believe that the banks’ willingness to lend to CCT with security over just one asset, Capital Tower, is an affirmation of their confidence in the quality and value of CCT’s portfolio as well as its blue-chip tenant base.’

As a result, out of CCT’s portfolio of eleven properties, eight properties with a total asset value of S$2.8 billion will be free of any encumbrance. This will provide the trust with financial flexibility in managing its capital and balance sheet, Ms Leong said.