MAPLETREE LOGISTICS TRUST
M44U.SI
Mapletree Logistics Trust: Proposed issuance of S$250m of perpetual securities
- Mapletree Logistics Trust (MLT) recently announced that it intends to issue S$250m worth of fixed rate perpetual securities.
- The net proceeds of this issuance would be used for general corporate funding purpose, which may include the financing of potential acquisitions and asset enhancement initiatives.
- The perpetual securities will come with a fixed rate of 4.18% per annum, with the first distribution rate reset falling on 25 Nov 2021 and subsequent resets taking place every five years thereafter.
- MLT’s decision to issue new perpetual securities does not come as a surprise to us, as it had previously raised funding via this avenue, and currently has S$344.0m of perpetual securities recorded on its balance sheet, as at 31 Mar 2016.
- Moreover, MLT’s gearing ratio was 39.6% as at end FY16. This leaves it with minimal debt headroom of ~S$41.0m before reaching a gearing ratio of 40%.
- While MLT has debt headroom of S$518.2m before hitting the regulatory gearing limit of 45%, we believe management would prefer to leave a buffer.
- As perpetual securities are recognised as equity, it allows MLT to keep its gearing at a comfortable level.
- We maintain our HOLD rating and S$1.02 fair value on the stock.
Wong Teck Ching Andy CFA
OCBC Securities
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http://www.ocbcresearch.com/
2016-05-18
OCBC Securities
SGX Stock
Analyst Report
1.02
Same
1.02
