Keppel Land to issue S$500mln convertible bonds

Proceeds will be used to finance potential acquisition opportunities in the future, to refinance existing debts and for working capital purposes.

Keppel Land Limited (Keppel Land) announced on Tuesday that it will issue S$500 million in aggregate principal amount of unsecured convertible bonds. The Singapore-dollar denominated bonds will bear interest at the rate of 1.875% per annum, payable semi-annually in arrears. The initial conversion price has been set at a 33% premium over the closing price of S$5.05 per Keppel Land share on 8 November 2010.

The convertible bonds, which have a term of 5 years, will be convertible into new Keppel Land ordinary shares at an initial conversion price of S$6.72 per new share, according to a Keppel Land report.

Upon full conversion of the bonds, a total of 74,404,761 new Keppel Land ordinary shares will be issued, representing 5.13% of Keppel Land's existing issued and paid-up share capital as at 8 November 2010.

Keppel Land intends to use the net proceeds of approximately S$493 million in the following manner :

1. approximately 80% to 100% to finance potential acquisition opportunities which the Company may pursue in the future as part of its strategic objectives and/or to refinance existing debts; and
2. approximately 0% to 20% for general corporate and working capital purposes.

Goldman Sachs (Singapore) Pte. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch have been appointed Joint Lead Managers for the issue of the convertible bonds.

"Keppel Land is constantly seeking new acquisitions as part of our growth strategy. The issue of the convertible bonds represents an additional source of growth capital for the Company to pursue opportunities in Singapore and the region. We are pleased with the outcome of the convertible bond issue, which was attractively priced and well received with the initial conversion price of S$6.72 representing Keppel Land's highest price level in more than 3 years," said Mr Kevin Wong, Group Chief Executive Officer of Keppel Land.

The issue of the bonds is subject to in-principle approval from the Singapore Exchange Securities Trading Limited for the listing of and quotation for the bonds and the new shares to be issued on the conversion of the bonds.