CDL trust seeks over $300m loans

(SINGAPORE) CDL Hospitality Trusts, the hotel operator partly owned by Singapore’s second-biggest property developer City Developments Ltd, is seeking more than $300 million of bank loans by July.

The trust, which owns five hotel properties in Singapore and one in New Zealand, has held talks with several banks for loans for working capital and to refinance existing debt, Vincent Yeo, CDL Hospitality’s chief executive officer, said in an interview. He declined to identify the banks or to disclose terms of the loans.

The worst global recession since the Great Depression has frozen credit markets, making it difficult for property owners to refinance debt.

Moody’s Investors Service said this month it would review ratings for Singapore’s 21 real estate investment trusts.

‘Credit is generally available but the terms demanded by the banks are more stringent than before,’ Mr Yeo said.

Some of the funds raised will go towards refinancing a $273 million loan maturing in July this year and the rest would fund working capital requirements, Mr Yeo said.

The trust, which runs hotels in Singapore including the Grand Copthorne Waterfront and Orchard Hotel, aims to cut costs by at least 10 per cent this year and spend more on sales and promotions to sustain demand as the global recession saps demand for tourism, he said.

CDL Hospitality has declined 32 per cent this year to 49.5 cents, compared with a 7.2 per cent drop in the benchmark Straits Times Index.