Tuan Sing unit to issue 3-year, 2.8% notes

Singapore

SUPERLUCK Properties, a wholly-owned subsidiary of mainboard-listed property developer Tuan Sing Holdings, is offering for sale three-year, Singapore-dollar notes carrying a fixed coupon of 2.8 per cent.

The senior secured notes will come under Superluck's newly established S$500 million multicurrency medium-term note (MTN) programme, which was announced on Sunday.

The principal amount of the notes, to be issued in denominations of S$250,000, has not been finalised. The interest will be payable semi-annually in arrears in April and October each year, starting from April 2020.

They will be guaranteed by Tuan Sing, and secured by a mortgage over two properties owned by Superluck at 8 Robinson Road and the strata units #11-01 and #11-02 of Far East Finance Building at 14 Robinson Road, according to a DBS term sheet released on Monday to potential investors.

The group's flagship building, 18 Robinson, obtained its Temporary Occupation Permit in January 2019. The 28-storey, freehold Grade-A office and retail tower has a diversified tenant base with a weighted average lease expiry of 3.9 years, Tuan Sing said in a filing on Sunday announcing the MTN programme.

The property and the Far East Finance strata units were valued at S$681.5 million and S$10 million respectively as at Oct 3, by Savills Valuation and Professional Services (S). Together, they have a total net lettable area (NLA) of 195,000 square feet.

The new bonds, as yet unrated, will carry the highest product risk rating of "5" on a scale of 1 to 5, according to the term sheet.

The S$500 million MTN programme is the group's second, after Tuan Sing's existing S$900 million multicurrency programme launched in 2013. It is unconditionally and irrevocably guaranteed by Tuan Sing.

DBS Bank and United Overseas Bank are the arrangers and dealers.

Under the programme, Superluck may issue notes denominated in Singapore dollars or any other currency agreed between Superluck and the relevant dealer(s), in one or more tranches and on a syndicated or non-syndicated basis.

Net proceeds will be used to refinance Superluck's existing borrowings, as well as finance or refinance the acquisition, development, renovation and/or refurbishment of 18 Robinson and the strata units.

William Liem, chief executive officer of Tuan Sing, said the new MTN programme will improve the group's debt maturity profile. "It is a good opportunity for us to capitalise on the low interest rate environment for fundraising to support the continued development of our properties."

Shares of Tuan Sing closed up 0.5 Singapore cent at 33.5 cents on Monday.