Lippo Malls markets Singapore dollar bond at low 4% area

[SINGAPORE] Lippo Malls Indonesia Retail Trust launched bookbuilding on an offering of five-year Singapore dollar bonds at a price guidance to yield in the low 4 per cent area.

OCBC and Standard Chartered are joint lead managers and bookrunners on the offering off Lippo's S$750 million guaranteed EMTN programme. The bonds will be issued in the name of LMIRT Capital with HSBC Institutional Trust Services, in its capacity as trustee of LMIRT, as guarantor.

The offering follows a S$260 million term loan the S-Reit obtained from BNP Paribas and StanChart. While the loan will be used to refinance existing bonds, including a S$200 million unsecured bond due to mature in July, proceeds from the bonds are likely to be used for merger-and-acquisition purposes, and also for refinancing debt.

Moody's announced last Friday that it had, for the first time, assigned a Baa3 rating to LMIRT, although the bond is unrated.

The rating agency has noted that the trust's portfolio of net lettable area has a total appraised value of around S$1.8 billion. While the trust is expected to tap unsecured borrowings to fund acquisitions, LMIRT is likely to hedge most of its cash flows via currency options.

REUTERS