Wednesday, September 22, 2010

Mapletree Logistics Trust

Mapletree Logistics Trust (MLT): similar to the recent equity fund raising by Ascott Residence Trust, MLT will raise $305m via, i) private placement of 207m units at $0.825 each, and ii) 2-for-25 preferential offering at $0.815 each. New issues are priced at 6-7% discount to last closing price at $0.88, and resulting share dilution is ~21%, but mgt guides for deal to still be mildly DPU accretive (+1.2%)...

Proceeds will be used to finance 9 previously announced and proposed acquisitions in Vietnam, Singapore, Japan and S Korea with combined value of $440m. Gearing is expected to drop to 38% from current 46%, allowing MLT to continue pursuing debt-funded acquisition growth.

Separately, MLT will acquire AW Centre, a 4-storey single user bonded warehouse at Tuas, for $18.3m in a sale-and-leaseback transaction. While small, deal is yield accretive, with initial net property yield of 8%, vs existing Singapore portfolio of 6.5%. Contract also provides for escalations of 1.5% pa. Deutsche has a Buy rating with $0.95 target.

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