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CDL to raise S$1.5b through Sentosa Cove investment platform

Tuesday, December 16, 2014 - 10:14
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The Quayside Collection comprises W Singapore hotel, F&B and retail Quayside Isle, and The Residences at W Singapore.

CITY Developments Limited (CDL) will raise a total of S$1.5 billion through a partnership with Blackstone's Tactical Opportunities Fund and CIMB Bank Berhad, Labuan Offshore Branch to create an investment platform that will invest in the cashflows of CDL's properties in Sentosa Cove.

Announcing this on Tuesday, CDL said the Profit Participating Security (PPS), as the investment instrument is called, will see the investors receive a fixed payout based on 5 per cent interest per annum for a period of five years, in addition to a participation in the cashflows over the period that they hold the PPS.

The total aggregated value of PPS is S$750 million, comprising S$281 million subscribed by Astoria Holdings, a wholly owned subsidiary of CDL; Blackstone's Tactical Opportunities Fund will invest S$367 million; and CIMB Bank will contribute S$102 million. Concurrently, DBS Bank and Oversea-Chinese Banking Corporation will provide S$750 million in value of senior loan facilities.

The Quayside Collection, an upscale integrated development on Sentosa island, comprises three adjacent properties developed by CDL:

• Hotel - The five-star hotel W Singapore - Sentosa Cove

• Retail - Quayside Isle, a waterfront F&B and retail property

• Residential - Apartments of The Residences at W Singapore - Sentosa Cove

CDL executive chairman Kwek Leng Beng said: "This offers investors a rare opportunity to participate in the cashflow from high-quality assets in Sentosa Cove. By leveraging on the operating strength and solid cashflows of the Quayside Collection, we will be able to build and deploy capital for our global plans."

The PPS is the latest of a number of unique platforms which CDL has unveiled. Several years ago, it broadened the range of financial instruments it can use by issuing sukuk or Islamic financing, and was also the first to launch a hotel-based real estate investment trust (H-Reit).

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