CapitaLand

CapitaLand: Group proposes to issue $650m convertible bonds due 2020. The 1.85% p.a. yield-to-maturity will have a conversion price of $5.00 for each new share. Upon full conversion of the CBs, 130m new shares representing 3.1% of the existing share capital will be issued. NTA per share after the CB issue and before any conversion would be marginal, increasing by 0.2% to $3.51. Gearing would stay flat at 0.44x after the issue. Group also proposed a repurchase of its $1.3b 3.125% convertible bonds due 2018, which has an aggregate outstanding amount of $1.05b. The group will fund the consideration with the issuance of the $650m (in previous posting), extending its CB term by 2 years, at a lower interest rate of 1.85%. However, this might cause an increase in the existing share capital base, as the 3.125% CB holders will convert their existing CBs into new shares, rather than to tender their CBs at the minimum offer price of 109% of the principal amt of the CBs. The conversion of the $1.05b remaining 3.125% CBs will marginally dilute existing share capital base by 147k new shares, upon its 4.3b shares outstanding.