CCT – Lim and Tan

Good Demand For Debt Paper

CCT has this morning successfully issued $225 mln worth of convertible bonds, which on full conversion at $1.356 per unit, will lead to issuance of 169.93 mln new units, representing 5.9% of existing units. The coupon rate is 2.7%. (There is an over-allotment of $25 mln, which if fully converted, will result in the issuance of 18.44 mln new units, or 0.65% of existing issued.)

COMMENTS

1. Dilution is insignificant.

2. While 75-90% of the proceeds have been earmarked for "asset enhancement and refinancing of existing liabilities", the capital raising will give CCT the flexibility when other opportunities present themselves.

3. Note that 8 assets with asset value of $2.8 bln, out of 11 in CCT's portfolio valued at $6.1 bln, are unsecured against any borrowings.

4. We still believe the revival of earlier plan to redevelop the Market Street Car Park is a distinct possibility in the not-too-distant future, which if so, would send a strong message on what management thinks of the office market, where consensus is for a glut in the next 2 years.

5. As at end '09, CCT's gearing is a comfortable 33%: total debt of $2003.86 mln, down from $2561.6 mln a year ago, on total assets of $6100 mln. Debt would have dropped by $125 mln following the partial repayment of the Medium Term Notes due on Mar 17 '10, reducing gearing to 30.8%.

6. With yield of 6.6% based on annualized DPU for Q4 '09, and a pro-active management, we maintain BUY.