CMT – Lim and Tan

Taking advantage of demand for fixed income securities, CMT is issuing up to $350 mln convertible bonds due 2014. (110,170,985 new units will beissued upon full conversion if $100 mln upsize option not exercised, and 154,239,379 if exercised.)

• This is “cheap” money for CMT, with coupon rate of 2.125%, and conversion price of $2.2692 a unit, 24% above current market price, and 48% above latest NAV of $1.53.

• Earlier indications were for issuance of up to $300 mln worth of CB; 1.625-2.125% coupon and 20-25% conversion premium, ie CMT settled for higher end of premium but higher coupon.

• We maintain BUY, especially with the imminent IPO of Mapletree Commercial Trust (MCT).

• Indications are that MCT will want to raise S$1 bln and offering a yield of between 5.2% and 5.8%.

• Being almost a single-asset trust (Vivo City, and 2 nearby office blocks), we do not find MCT attractive, especially compared to CMT, which has literally swiped most of the desirable retail malls in this country.

• This in turn implies that to grow, MCT would have to look outside Singapore, a recipe for stock market under-performance.

• CMT’s yield is currently 5.1%.

(MCT is expected to embark on a one-week roadshow of presentations to potential investors beginning Mar 22nd, with listing likely on April 8th.)