CICT unit issues HK$755 million fixed rate notes due 2033 priced at 4.85%
CAPITALAND Integrated Commercial Trust’s (CICT) wholly-owned subsidiary CMT MTN has issued HK$755 million (S$130 million) worth of fixed rate notes to institutional or sophisticated investors.
The notes will mature on Mar 15, 2033, and will bear interest at a rate of 4.85 per cent per annum, payable annually in arrear.
Proceeds from the notes issue will be used to finance or refinance eligible green projects undertaken by CICT and its subsidiaries in accordance with the group’s green finance framework, the real estate investment trust (Reit) said on Wednesday (Mar 15).
The Singapore Exchange Securities Trading (SGX-ST) has granted approval-in-principle for the listing and quotation of the notes, so the notes will be listed and quoted on the SGX-ST on or about Mar 16, it added.
The notes were issued under the US$3 trillion Euro-Medium Term Note programme which CMT MTN established in 2010, and are unconditionally and irrevocably guaranteed by HSBC Institutional Trust Services, in its capacity as trustee of CICT.
The trustee will also guarantee the issuer’s obligations as it undertakes transactions to swap the Hong Kong dollar proceeds of the notes into Singapore dollar proceeds of about S$132.7 million at a Singapore dollar fixed interest rate of 4.026 per cent per annum.
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Moody’s Investors Service assigned the notes a senior unsecured rating of A3. This takes into consideration CICT’s track record of strong access to funding, and has manageable refinancing needs over the next 12 to 15 months due to proactive capital management, Moody’s said in a note.
The rating also incorporates Moody’s expectation that CICT’s earnings will improve over the next 12-18 months because of higher contributions from acquisitions completed last year, it stated.
The ratings agency, meanwhile, gave the notes a “negative” outlook, owing to CICT’s elevated leverage and uncertainty around the trust’s ability to balance deleveraging with its growth strategy.
Units of CICT closed 2.2 per cent or S$0.04 higher at S$1.88 on Wednesday.
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