CapitaMall Trust milks S$245.8 from private placement

Here are 2 ways for them to deploy proceeds.

According to Nomura, the manager has priced a private placement of 125mn new units (3.8% of outstanding units) at SGD2/unit and raised SGD245.8mn in net proceeds.

Here's more from Nomura:

Following the placement, we estimate its gearing will reduce from 37.7% to 35.1%. The new units are expected to be issued on 30 November. We believe that the proceeds could be deployed in the following ways:

 Address capex requirements. CT’s combined outstanding capital commitment for the Westgate project and Raffles City’s asset enhancement works out to c.SGD114mn. In addition, we believe the proceeds raised provide the manager with the flexibility to fund asset enhancements and/or acquisitions that are yet to be announced.

 Address FY13F debt maturities. Outstanding debts of c.SGD465mn will mature in FY13F, on our estimates. The manager recently raised HKD885mn (SGD140mn) by issuing MTNs due in 2023 at a fixed rate of 3.3% to refinance some of these debts.

As highlighted before, while we believe that there are potential acquisition targets for CT to consider, considering its gearing of 35% and the prevailing tight cap rates for good quality suburban retail assets, we suspect the market may not view such possible deals favourably.