Capitaland

Capitaland: OCBC maintains Buy with $3.77 TP. House note that CAPL priced its proposed S$750m 2023 convertible bond issue at 1.95% yield to maturity with a conversion price of S$4.212. The group announced that they will use ~95%-100% of the proceeds to refinance its existing indebtedness and has set up an invitation to repurchase for cash existing CBs due in 2016 and 2018. House see this as a positive move that would reduce interest payments and lengthen the group’s average debt expiry. Also look forward to CAPL’s new condominium launch – the 694-unit Sky Vue in Bishan. While estimate fairly slim profit margins in the low teens due to the pricing, believe a strong launch would be taken positively by the market, particularly now that the group has a large unsold exposure of over a thousand units in the Bishan locality in Sky Habitat (340 units unsold) and Sky Vue (694 units unsold).