CMT / CCT – BT

CapitaMall Trust and CCT issue US$645m secured notes

CapitaRetail China Trust raises gross proceeds of $70m from placement

CAPITACOMMERCIAL Trust (CCT) and CapitaMall Trust (CMT) yesterday announced the issue, through Silver Oak, of US$645 million five-year secured floating rate notes (FRNs).

Separately, CapitaRetail China Trust (CRCT) – another trust in the CapitaLand stable – announced a successful private placement.

The FRNs issued by Silver Oak are secured by Raffles City Singapore, a mixed-use property jointly owned by CCT (60 per cent) and CMT (40 per cent), through special-purpose trust vehicle RCS Trust.

Silver Oak is a special-purpose company incorporated to provide credit facilities to RCS Trust.

Half of the notes have been placed with Asian institutional investors and the other half with European investors. The issue was 1.7 times subscribed.

Proceeds from the notes – which have been assigned an AAAsf rating by Fitch Inc and a Moody’s Investors Service rating of Aaa(sf) – have been swapped into S$800 million.

In addition, Silver Oak has drawn down S$164 million from a S$200 million five-year term-loan facility granted by DBS Bank, HSBC and Standard Chartered Bank.

‘The S$800 million proceeds from the FRN, together with the amount of S$164 million term loan, are on-lent to RCS Trust to refinance RCS Trust’s existing aggregate debt of S$964 million, ahead of the latter’s expected maturity date on 13 September 2011,’ said the managers of CCT and CMT.

‘The balance S$36.0 million of the term loan is expected to be fully drawn down in September 2011 to finance purposes such as asset enhancement initiatives and working capital.’

The interest rates payable by RCS Trust for the S$800 million proceeds and the S$200 million term loan will be fixed at 3.09 per cent per annum and 3.025 per cent per annum respectively, from Sept 13.

CapitaCommercial Trust Management Limited chief executive officer Lynette Leong noted that this ‘marks the completion of the early refinancing of CCT’s only outstanding debt for 2011 and extension of its portfolio debt maturity’.

The three banks have further granted a five-year committed revolving credit facility of S$300 million, available to finance future capital expenditure, asset enhancement initiatives, and general corporate and working capital purposes.

Meanwhile, CRCT announced yesterday that its initial private placement size of S$55 million was 2.5 times subscribed. As a result, the full upsize option was exercised, raising gross proceeds of about S$70 million through the placement of 59.8 million new units.

Said Victor Liew, chairman of CapitaRetail China Trust Management Limited (CRCTML): ‘The strong demand by investors for the private placement is testament to the attractiveness of CRCT as an investment for unitholders to tap into China’s consumption growth.’

Each new unit was issued at $1.17, representing a discount of approximately 3.2 per cent to CRCT’s adjusted volume weighted average price.

The total demand book comprised over 40 existing and new investors from Asia, the United States and Europe.

CapitaMalls Asia’s (CMA’s) subsidiaries subscribed for about 12.9 million new units.

Gross proceeds from the private placement will be used to finance the acquisition of New Minzhong Leyuan Mall, with the remaining balance funded by a drawdown from CRCT’s existing debt facilities.

CRCTML also intends to declare an advance distribution for existing unitholders, for the period from Jan 1 to June 29, at an estimate of between 4.26 cents and 4.30 cents per unit.

The books’ closure date for the advance distribution is June 29 at 5pm. The advance distribution will be paid around Sept 23 this year.

In the stock market yesterday, CCT shares closed two cents lower at $1.43, CMT shares closed one cent lower at $1.90, and CRCT shares closed three cents lower at $1.22.