CapitaLand Residential Limited ("CRL") is completing a S$200 million progress payment securities Fixed Rate Bond issue on 15 June 2001, which has received positive response so far.

The issue is the first internationally rated securitisation transaction in Singapore, and is arranged, underwritten and lead-managed by Bayerische Hypo- und Vereinsbank AG ("HVB").

This progress payment securitisation has attracted much interest among international investors, as well as other investors includinginsurance companies, banks, pension funds and fund management companies.

The securitisation is issued via a bankruptcy remote special purpose company, Peridot Investments Limited ("Peridot"). The main underlying security are the progress payments from sold and unsold units of three CRL projects, namely SunHaven, Palm Grove and The Loft. Proceeds from the securitisation will be extended as loans to the Project Companies for refinancing of land and construction costs.

The S$200 million issue has an average maturity life of six years. There are four tranches from the issue and these are rated AAA, AA, A and BBB by international rating agency Fitch Inc, who will be reviewing the transaction on an on-going basis.

The interest coupons for the bonds are as follows:AAA - 3.71 percentAA - 3.83 percentA - 4.09 percentBBB - 4.79 percent

A substitution of eligible projects is expected to occur in the second and third years of the issue. Substitution projects must meet pre-agreed eligibility criteria and be approved by the rating agency and the Completion Guarantor. This ensures the integrity of the overall security arrangement and the quality of the structure. The substitution of projects gives the issue a revolving feature that allows proceeds to be used to finance future projects. This facilitates the issue of long dated notes to take advantage of the current level of low interest rates.

HVB, as the Completion Guarantor, will provide a completion guarantee for each existing and future eligible project to be included in the structure. HVB long-term debt ratings are rated AA-, Aa3, and A+ by Fitch, Moodys and Standard & Poors respectively. By isolating the development risks via a completion guarantee, the rating agency Fitch Inc was able to rate the transaction based on the project cashflow, performance of the purchasers and the marketing of unsold units.

Rules and regulations governing progress payments and project completion are clearly defined and thus give protection to the investors in the progress payment securitisation.

Perspectives of Senior Management:

The advantage of this structure over conventional financing is that it allows CRL to raise financing at low interest rates, reflective of the strength of the underlying cashflow from achieved sales. Additionally, the credit rating facilitates diversification of funding source by allowing access to non-traditional investors and the international market." Steve McMillan, Chief Operating Officer, CapitaLand Residential

We are pleased to work with CapitaLand Residential Limited, a strong partner who has an excellent reputation for good quality project management, as evidenced by the international AAA rating for this landmark transaction. We are also excited to play a part in increasing the level of awareness of structured bonds among investors."Eddie Wong, Chairman of the Managing Committee, Asia, HVB

About CapitaLand Residential Limited:

CapitaLand Residential Limited is committed to developing premier, high quality homes in its target markets. Its portfolio includes quality developments such as Avalon, Aspen Heights, The Loft and SunHaven in Singapore, Woodcroft and Balmain Shores in Australia, and Chrysanthemum Park in Shanghai, China.

It aims to build its premium position with emphasis on product leadership and the continuous introduction of innovation including enhanced living environments and intelligent e-lifestyle residences.

CapitaLand Residential is the residential property business unit of CapitaLand Limited, Southeast Asias largest listed property company with assets of more than S$19 billion.

About Bayerische Hypo- und Vereinsbank AG:

Bayerische Hypo- und Vereinsbank AG is part of the HVB Group, one of the three biggest banks in Europe. A full-service bank focused on real estate financing, asset management, structured finance and intergrated capital-market operations, the Bank enjoys a leading position in the economic hub of Germany, Austria and Central and Eastern Europe. As at end 2000, The Groups total assets and equity capital stood at 716.5 billion Euros and 19.6 billion Euros respectively. With offices at all the worlds major financial centres, the Group boasts a customer base of eight million.