CDL H-Trust – Phillip

• Price fixed at $1.71, private placement of 116,960,000 new stapled securities

• Net proceeds approximately $196.4 million

• Maintain Hold, fair value at $1.92

One day after CDL HT announced the proposed private placement, it followed up with another announcement that book building for the private placement is closed and is oversubscribed. The issue price is fixed at $1.71, the lower end of the proposed price range and with the upsized option exercised, 116,960,000 new stapled securities will be issued. Trading is expected to commence on 1 July 2010.

The strong take-up indicates that there is strong interest in the stock among the placees. However share price fell 6.3% from its previous close of $1.89 to close at $1.77 yesterday. This is more than the ‘TERP’ we estimated at $1.86. We gather that existing shareholders were not too happy being left out of the placement exercise. Nevertheless, the balance sheet now looks stronger and more ready to act on any acquisition opportunities. Furthermore, we

are still a firm believer in the Singapore tourism sector and that CDL HT stands to benefit from the strong rebound in the sector.

We adjusted our forecasts to account for the dilution and the interest savings. These reduce our DPS forecasts for FY10E-FY12E by 6.5%-7.7%. We reduce our fair value from $1.96 to $1.92 and maintain our hold recommendation.