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Cambridge Industrial Trust re-opens SGD bond market
Cambridge Industrial Trust (CIT) on January 20 priced a S$55 million (US$41.35 million) tap of its November 2018 bonds as it successfully re-opened the Singapore dollar bond market this year.
Chito Santiago 22 Jan 2015

Cambridge Industrial Trust (CIT) on January 20 priced a S$55 million (US$41.35 million) tap of its November 2018 bonds as it successfully re-opened the Singapore dollar bond market this year.

 

The transaction, priced at par with a coupon of 3.50%, brought the total issuance to S$155 million, making it CIT's largest Singapore dollar corporate bond outstanding.

 

The deal was launched following the release of CIT's 2014 fourth quarter results. A series of fixed income investor meetings were held on January 19 and as a result, the company was able to generate strong anchor orders from institutional investors.

 

"Being the first investment grade and Reit borrower to access the Singapore dollar bond market in 2015, this transaction was a good litmus test for the market," says David So, director for debt capital markets in Southeast Asia at the Royal Bank of Scotland, which acted as the sole bookrunner for the transaction. "Clearly, the market conditions have been weaker this year with the Asia iTraxx index 15bp wider. However, CIT had a strong set of fourth quarter results for 2014 and a good following from high quality institutional investors on their four-year S$100 million new issue in November 2014."

 

Following a constructive set of investor meetings on January 19, the arranger identified an execution window to open books on a tap of the November 2018 bonds. The transaction received strong support from institutional accounts with the order book at over 1.4x oversubscribed.

 

CIT will use the bond proceeds to refinance a S$50 million bond deal maturing on March 15 and the rest for general working capital purpose.

 

The deal garnered almost S$80 million worth of demand, mainly from real money accounts. By type of investors, 91% of the bonds were sold to fund managers, 8% to insurance companies and 1% to private banks. "There is a strong institutional bid for the right credit and that is what CIT has demonstrated in this deal," notes So.

 

For 2015, he says the Singapore dollar bond market will still offer a good pool of liquidity. But it will be increasingly selective as to the type of issuers - and structures - accessing the market.

 

Listed on the Singapore Exchange with a market capitalization of S$877 million, CIT is Singapore's first independent industrial real estate investment trust. It principally invests in real estate-related assets in Singapore used primarily for industrial, warehousing and logistics purposes.

 

CIT also has a pan-Asian mandate and plans to increase focus on developed key industrial markets such as Australia and Japan, which mirror Singapore's sovereign risk and transparency characteristics.

 

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