CapitaCommercial Trust (CCT) has priced its five-year convertible bond, resulting in a 2.5% coupon and yield, and a 23% conversion premium. The final size was S$175 million ($141 million), an increase from the original plan for S$150 million.
The deal drew robust demand thanks to the company’s high-quality credit — about 70 investors took part and the book was multiple-times covered, a source said yesterday. They were multi-strategy and outright investors from Asia and Europe, the source noted. The deal was launched at 7.30pm and priced at 11pm in Hong Kong on Monday.
The latest CB comes about a week after Taiwan’s Cathay Financial raised $254 million from a two-year zero coupon CB, which followed a period of absence of new CB in Asia since the end of May.
CCT, which was listed on the Singapore Exchange Securities Trading (SGX-ST) in 2004, is Singapore’s first Reit investing exclusively in quality income-producing commercial properties, according to its website. Managed by CapitaCommercial Trust Management, an indirect wholly-owned subsidiary of CapitaLand, CCT has grown to be the biggest listed commercial Reit by asset size since inauguration, it says.
CCT’s CB was offered with a coupon and yield-to-maturity between 2.25% and 2.75%, and an initial conversion premium of 20% to 25% over Monday’s close of S$1.37, according to the term sheet. The final premium of 23% represents a conversion price of S$1.6851. The bonds are convertible into new common units. The deal resulted in a bond floor of 96% and an implied volatility of 16%.
In its capacity as the trustee of CCT, HSBC Institutional Trust Services was the issuer, according to the term sheet.
Credit Suisse and J.P. Morgan were the joint bookrunners for the deal.
CCT plans to use the proceeds for general corporate purposes, including funding of a tender offer for its 2% CBs due 2013. Separately on Monday, CCT announced the launch of the tender offer for cash repurchase of any or all of the outstanding S$370 million CBs due 2013.
Prior to the transaction, CCT ended Monday’s trading down 1.8% at S$1.37. But it has gained more than 38% so far this year, compared to the Straits Times Index, which is up about 17% during the same period.
