Friday, November 19, 2010
Suntec Reit: OCBC maintains Buy. Notes MBFC being acquired at a fairly tight initial yield of 4%, but views this as a sound acquisition from a long-term, strategic perspective. Says Suntec to fund the total acquisition cost through debt (72%) and a private placement (28%). Revises earnings estimates to incorporate the proposed acquisition, assumed to be completed 1 Jan ‘11. New TP of $1.63, reduced only slightly from $1.64, as lower-than-expected cost of debt offsets dilutive effects of new unit issue.