CapitaLand successfully completes the issuance of S$650 million seven-year convertible bond issue and repurchase of outstanding bonds
Achieved attractive coupon of 1.85% and high conversion premium of 32.6%
Longest tenor convertible bond in Asia Pacific ex-Japan since 2009
Concurrent repurchase of S$492.5 million 2018 convertible bonds and S$229 million 2016 convertible bonds
Singapore, 20 June 2013 – CapitaLand Limited (CapitaLand) is pleased to announce that it has successfully issued unsecured convertible bonds (Bonds), raising gross proceeds of S$650 million, and concurrently completed a repurchase of a total of S$721.5 million in principal amount of its outstanding 2016 and 2018 convertible bonds.
The Issue (Issue), which was priced on 20 May 2013, achieved a tenor of seven years and attractive pricing with a conversion premium of 32.6%.
The Bonds are convertible into new CapitaLand ordinary shares at a conversion price of S$5, which is a 32.6% premium above the closing price of S$3.77 on 20 May 2013. The Singapore Dollar denominated Bonds will bear a coupon rate of 1.85% per annum, calculated on a semi-annual basis.
Concurrent with the issue, CapitaLand repurchased for cash S$432.5 million in principal amount of its 3.125% convertible bonds due 2018 (2018 Bonds) pursuant to a tender offer from 21 May 2013 to 11 June 2013 (Tender Offer), along with open market repurchases of an additional S$60 million in principal amount of 2018 Bonds and S$229 million in principal amount of its 2.875% convertible bonds due 2016 (together with the Tender Offer, the Bond Repurchase).
The Tender Offer was launched concurrently with the Issue on 20 May 2013. On 14 June 2013, CapitaLand announced that it had received valid tenders of S$619.75 million in principal amount, and accepted S$432.5 million in principal amount to be repurchased at the Tender Offer clearing price of 111.5%. The Tender Offer clearing price of 111.5 % is at a 1% premium above the market price of the 2018 Bonds immediately prior to the announcement of the launch of the Tender Offer. The annualised premium of the Tender Offer clearing price is 0.2% to maturity or 0.5% to investor put date. With this Tender Offer, CapitaLand achieved the lowest annualised premium and the largest tender offer in Asia Pacific ex-Japan.
Combined with the Issue, the Bond Repurchase effectively lengthens the average maturity of CapitaLand’s outstanding debt and reduces its interest expense, while also minimising dilution to existing equity holders. With the Issue and Bond Repurchase, the Group has achieved a well distributed and extended debt maturity profile with more attractive terms.
Mr Arthur Lang, Group Chief Financial Officer, CapitaLand Limited, said: “We are pleased that CapitaLand successfully conducted this concurrent issuance of new convertible bonds and buyback of existing convertible bonds from the market. The success of this transaction, as evidenced by the attractive terms, reflects strong investor confidence in CapitaLand. This issuance further strengthens the Group’s balance sheet and demonstrates a disciplined approach to capital and liability management. The Issue provides long-term financing at attractive terms, reduces our finance costs, and with the Bond Repurchase, will allow us to better distribute and lengthen our debt maturity profile.”
Credit Suisse (Singapore) Limited and Merrill Lynch (Singapore) Pte. Ltd. were the joint bookrunners and lead managers for the Issue. Credit Suisse acted as sole dealer manager in respect of the Tender Offer.