Author: tfwee
FSL – SGX
FSL TRUST TO TRADE IN S$ FROM 30 NOVEMBER 2007
Singapore, 22 November 2007 – FSL Trust Management Pte. Ltd. (“FSLTM”), Trustee-Manager of First Ship Lease Trust (“FSL Trust”), announced today that the trading currency of FSL Trust’s units will be changed from USD (United States Dollar) to SGD (Singapore Dollar). Trading in SGD will commence on Friday, 30 November 2007.
Mr Cheong Chee Tham, Senior Vice President and Chief Financial Officer of FSLTM, explained: “We believe that the change in trading currency will enhance liquidity of the counter as it removes the necessity of foreign exchange conversion. With easier settlement of trades, retail investors, in particular, will find it more convenient to trade in FSL Trust’s units.
“In addition, several funds and insurance companies in Singapore, which are permitted to invest only in SGD-denominated stocks, can now consider FSL Trust as an investment option. This will expand our universe of potential institutional investors.”
Future periodic distributions to unitholders will continue to be denominated in USD. As with past distributions, unitholders will have the option to elect and receive their distribution entitlements in either USD or SGD.
Source : SGX
PST – UOBKH
The trump card: debt restructuring.
Setting into motion its target of US$200m worth of ship acquisitions p.a. We believe the re-rating of Singapore shipping trusts is contingent on accretive ship acquisitions. Pacific Shipping Trust (PST) has set a ship acquisition target of S$200m p.a. It rolled this into motion with the recent acquisition of two 4,250 TEU containerships from its sponsor, Pacific International Lines (PIL). These two ships are part of the 38, which PST has the Right of First Refusal to acquire from PIL. The acquisition will increase PST’s current fleet from eight to 10 vessels and raise its fleet capacity by 61% from 13,864 to 22,364 TEUs.
Acquisition is accretive. We estimate PST’s latest acquisition offers an asset yield of 10.5% and an IRR of 8.5%. Whether the acquisition is funded totally by debt at an approximate 6% cost of borrowing or by a mixture of debt and equity at WACC of 7%, the acquisition should be accretive to unitholders. As PST is repaying its debt, falling interest expense will also boost distributable cash and dividend yield, which we forecast will rise from 10.2% in 2007 to 12.6% by 2012.
Debt restructuring is PST’s trump card. PST has a conservative straightline debt repayment period of over 10-12 years from the time it was listed compared with its initial fleet’s remaining economic lifespan of about 26 years. Its debt repayment schedule is conservative compared with First Ship Lease Trust’s (FSLT) and Rickmers Maritime’s (RMT) and explains PST’s FY08 EBITDA yield (after interest expense before debt repayment) of 18.0% compared with FSLT’s 12.6% and RMT’s 11.1%. We do not discount the possibility of debt restructuring though PST’s management presently has no plans to do so. This would place PST on an equal footing with FSLT and RMT. The additional distributable cash flow arising from debt restructuring could be used for ship acquisitions or higher dividend payout.
Yield-based target price: US$0.50. We expect the dividend yields of Singapore shipping trusts to compress due to re-rating on the back of accretive acquisitions, similar to that experienced by their US peers. We expect PST to trade at a dividend yield of 8.5% by end-08 and 8.0% by end- 09. This translates into target prices of US$0.50 and US$0.53 respectively. PST’s current share price trades at a 35% discount to our DCF valuation of US$0.64/share and 0.86x P/RNAV.
CCT – BT
CapitaCommercial Trust sets up $1b notes programme
Multi-currency scheme has been rated ‘Baa1’ by Moody’s agency
CapitaCommercial Trust (CCT), one of Singapore’s biggest office landlords, announced yesterday the establishment of a $1 billion multi-currency medium-term note (MTN) programme.
The programme was established by CCT MTN Pte Ltd – a wholly owned unit of CCT trustee HSBC Institutional Trust Services Singapore.
The MTN programme will allow CCT MTN to issue notes in series or tranches in any currency as may be agreed between the company and DBS Bank, the arranger and the dealer of the MTN programme.
CCT MTN may issue each series or tranche of notes in various amounts and tenors, which may bear fixed, floating or variable rates of interest.
It can also issue hybrid or zero coupon notes.
All sums payable in respect of the notes will be unconditionally and irrevocably guaranteed by the CCT trustee.
The programme has been given a ‘Baa1’ rating by Moody’s Investors Service.
The net proceeds from each notes issue will be onlent by CCT MTN to HSBC. The CCT trustee can use the funds to: refinance existing borrowings; finance or refinance its investments; lend to any trust, fund or entity in which it has an interest; finance or refinance any asset enhancement works initiated by itself or such trust, fund or entity in which it has an interest; and for its general working capital.
CCT said yesterday that it has applied to the Singapore Exchange for permission to deal in, and quotation for, any notes which are agreed at the time of issue to be listed.
CCT last month posted distributable income of $29.6 million for the third quarter ended Sept 30, 2007 – 13.5 per cent higher than its forecast based on a circular dated August last year, and a 52.4 per cent improvement from the same period last year.
CCT’s Singapore properties include 6 Battery Road, Capital Tower, Robinson Point, HSBC Building, StarHub Centre and the Golden Shoe and Market Street car parks, and a 60 per cent stake in the Raffles City complex.
CapitaMall Trust is the joint owner of Raffles City complex.
LMIR – BT
Lippo-Mapletree trust falls 3.1% in market debut
(SINGAPORE) Shares of property trust Lippo- Mapletree Indonesia Retail Trust started trade yesterday at 77.5 cents in their Singapore stock market debut, down 3.1 per cent against the issue price of 80 cents a unit.
The units closed yesterday at 68 cents, down 12 cents or 15 per cent from the initial public offer (IPO) price.
Indonesia’s Lippo Group and Singapore’s Mapletree Investments sold 645.47 million shares at 80 cents, raising $516 million in their IPO for a joint property trust.
The Lippo-Mapletree Indonesia Retail Trust is based on around $1 billion worth of properties that comprise seven Indonesian shopping malls and seven retail spaces found in other malls, the prospectus said.
The listing of the Indonesian trust comes after Saizen Real Estate Investment Trust (Reit), which is based on residential buildings in Japan, tumbled 14 per cent in its Singapore market debut on more than a week ago.
Saizen’s sharp fall prompted Japan’s Asia Pacific Land to delay a US$350 million IPO in Singapore.
Mapletree, which is owned by Singapore investment company Temasek Holdings , has a 40 per cent stake in the joint venture that will manage the Indonesian trust.
The Lippo conglomerate, controlled by Indonesia’s Riady family, owns the remaining 60 per cent. — Reuters
PLife – UOBKH
An oasis in time of turbulence
Parkway Life REIT invests in income-producing real estate assets in the Asia Pacific region. The assets, used primarily for healthcare and related purposes, include hospitals, ambulatory surgery centres, primary clinics, medical office building, step-down care facilities such as nursing homes, research & development (R&D) facilities and pharmaceutical facilities. The initial portfolio comprises Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital in Singapore.
Riding on growth in healthcare focus. The annual rental payable by Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital comprises base rent and a variable rent. Total annual base rental from the three hospitals is S$30m. The variable rent is equivalent to 3.8% of adjusted hospital revenue. Adjusted hospital revenue encompasses inpatient, outpatient, car park, retail, pharmacy and food & beverage revenues. The variable rent allows unit-holders to ride on the growth of the healthcare industry due to an ageing population, medical tourism and growing affluence in Singapore and across the region.
Downside protection enhances defensive qualities. The minimum rent payable by each hospital is set at Consumer Price Index + 1% above rent payable in the preceding year. Where Consumer Price Index is negative for any given year, then it is deemed to be zero. This ensures that total rent payable is always increasing, which enhances the defensive quality of Parkway Life REIT.
Reiterate BUY. We like Parkway Life REIT for its healthcare focus. Acquisitions in Singapore and in the region will provide catalysts for growth in distribution yield. Parkway Life REIT trades at a discount of 6.4% to NAV/unit of S$1.25. Our target price is S$1.72 based on the discounted dividend model (WACC: 6.2%, terminal growth: 2%).