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Tuan Sing confirms Superluck issuing S$200m 2.8% notes at par under new programme

MAINBOARD-LISTED property developer Tuan Sing Holdings on Tuesday announced that its wholly-owned subsidiary, Superluck Properties, will issue S$200 million senior secured notes due 2022 under its newly established multicurrency medium-term note (MTN) programme.

The Business Times had reported earlier that Superluck is offering three-year, Singapore-dollar notes bearing a fixed coupon of 2.8 per cent to be paid semi-annually starting from April 2020, according to a DBS term sheet released on Monday.

Tuan Sing’s bourse filing on Tuesday stated that the three-year notes will be priced at par. They are expected to be issued on Oct 18, 2019, and mature on Oct 18, 2022.

The notes are also subject to a mandatory redemption in the event of the sale of Superluck’s property at 18 Robinson Road under a make-whole call provision, at the Singapore-dollar swap offer rate plus a 0.5 per cent premium.

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This will be the first issuance under Superluck's new S$500 million secured MTN programme which was announced on Sunday.

According to the DBS term sheet, the new bonds carry the highest product risk rating of “5” on a scale of 1 to 5.

They are guaranteed by Tuan Sing, and secured by a mortgage over 18 Robinson as well as the strata units #11-01 and #11-02 of Far East Finance Building located at 14 Robinson Road. Both properties are owned by Superluck. 18 Robinson is the group’s recently completed flagship property, a 28-storey, freehold Grade-A office and retail tower in the central business district.

DBS Bank and United Overseas Bank are the appointed joint lead managers and joint bookrunners of the new notes.

Net proceeds will go towards, among other things, refinancing the existing borrowings of Superluck, funding the future growth and development of Superluck’s properties, and implementing potential asset enhancement initiatives, Tuan Sing said on Tuesday.

Separately, Tuan Sing also announced on Tuesday that all the outstanding S$80 million, 4.5 per cent notes due in 2019 have been fully redeemed and cancelled. Those notes were part of the group’s earlier S$900 million unsecured multicurrency MTN programme launched in 2013.

Tuan Sing also has S$150 million, 6 per cent notes due in 2020, under the unsecured MTN programme.

William Liem, chief executive of Tuan Sing, said that the issuance of the 2.8 per cent secured notes coupled with the redemption of the 4.5 per cent unsecured notes will help the group lower its borrowing costs.

“We are happy to be able to capitalise on the current low interest rate environment to restructure our debt holdings and extend our debt maturity profile, and through this, generate higher operating margins and greater shareholder value over the long term,” Mr Liem added.

Tuan Sing shares ended at 33.5 Singapore cents on Monday, up 0.5 cent or 1.5 per cent.