CMT – BT

CMT repurchases $100m of bonds

CAPITAMALL Trust has repurchased convertible bonds (CBs) with total principal amount of $100 million (plus accrued interest) for a total cash consideration of about $105.25 million.

The repurchase was funded in cash from internal resources. ‘We saw an opportunity to proactively reduce our debt exposure for next year,’ said Simon Ho, CEO of CapitaMall Trust Management Ltd (CMTML).

The CBs repurchased were part of the $650 million CBs – with a coupon rate of one per cent and a yield to maturity of 2.75 per cent per annum – that were issued on on July 2, 2008, to help the trust fund its acquisition of The Atrium @ Orchard.

The settlement of the repurchase of the $100 million CBs took place yesterday and the repurchased CBs have been cancelled, leaving the outstanding aggregate principal amount of CBs currently at $550 million, CMTML said.

The CBs, due 2013, have a conversion price of $3.39. On the stock market yesterday, CMT closed three cents lower at $2.11.

CMT recently issued four-year and seven-year notes under its Multi-currency Medium Term Notes Programme, which took its gearing to 37.2 per cent. With the repurchase of the CBs announced yesterday, the trust’s gearing will drop slightly. ‘After this repurchase, CMT continues to have enough cash for its asset enhancement initiatives as well as general working capital,’ Mr Ho said.

The trust acquired The Atrium in May 2008 for $839.8 million, or $2,249 per square foot of net lettable area. In July this year, CMT unveiled plans to invest about $150 million in asset enhancement works for the asset. The first three levels of The Atrium will be converted to retail use and linked to Plaza Singapura. A canopy will be built along the open plaza between the two properties to maximise their combined 170-metre-long frontage along Orchard Road.