Keppel Land: Goldman Sachs (also the issuing manager of KLand convertible bonds) views grp $500m convertible bond issue positive, as the substantial conversion premium minimizes near-term dilution and will not be an overhang….
Expect upside potential from new leg of growth after developer has enjoyed near market dominance in Singapore Grade-A office. If fully converted, notes full dilution impact of today's issue and 2006's $300m convertible bond issue would be 8.8% post issuance….
Highlights that while KLand does not have immediate funding needs, grp appears ready to take advantage of investment opportunities at home and abroad, that could potentially lead to better returns. Keeps EPS estimates unchanged, NAV-based target price of $3.92, maintaining Neutral rating on which trades at premium to peers at 6% discount to forward NAV vs 18% sector discount.
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