CapitaCommercial Trust

CapitaCommercial Trust: OCBC Maintain BUY with a higher fair value estimate of $1.62 (vs $1.53 previously), as we incorporate firmer cap rates assumptions to reflect more benign expectations for the office sector. CCT recently announced that it had refinanced the outstanding balance of its convertible bonds due 2013 with a new $175m CB issue due 2017. The new 2017 CB has a yield to maturity of 2.5% (vs 3.95% for the 2013 CB), and would yield net proceeds of $171.9m, of which S$141.1m would be paid for the 2013 bonds (total of $126m face value) priced at 111.30 and $20.75m for the settlement of a clean-up call at 109.37 expected on 15 Oct12. House like that CCT continues to comfortably manage its debt expiry schedule and maintains steady access to capital markets at relatively attractive rates.