Real estate investment trust CapitaMall Trust, established in 2002 by Singaporean property group CapitaLand, has launched the fourth CMBS from its Silver Maple Investment Corp. medium-term note program. The latest deal, which at closing will be worth S$433 million (currently $256 million), takes overall issuance by CapitaMall Trust to $1.105 billion. It is also the ninth securitization tied to CapitaLand, either off its own program or through its two REITs, CapitaMall and CapitaCommercial Trust.

HSBC Securities is the arranger for the seven-year transaction, which was roadshowed in major European and Asian financial centers last week. Proceeds will finance the acquisition of four new, primarily retail, properties - worth S$699 million - to go into the trust. The overall portfolio now includes nine properties independently valued at S$3.3 billion, with a 1.76 times debt-service coverage ratio.

According to Fitch Ratings, the other buildings in the pool have performed strongly. Net income in 2004 was 26.7% higher than the agency's stabilized income prediction. Along with Fitch, Moody's Investors Service and Standard & Poor's have provisionally rated the latest deal triple-A and affirmed the same rating to the three previous offerings. Further support for the bonds, which have a 5.5-year expected life, comes through a S$70 million revolving credit facility.

Prior to this issue, CapitaMall most recently tapped the market in July 2004 with a $215 million deal, also arranged by HSBC (see ASR 8/2/04). The five-year notes priced at 32 basis points over Libor, which at the time represented a benchmark for offshore Singaporean CMBS.

However, the market has contracted substantially since then, with European buyers increasingly enticed by the strong performance shown in the Singaporean property sector. In March Suntec REIT established a new mark of 16 basis points for its 327 million ($389.8 million) deal via JPMorgan Securities. Spreads have widened since then, but the most recent Singaporean CMBS - Prime REITs 190 million issue arranged by HSBC and Standard Chartered - priced at 22 basis points, inside the indicative price range (see ASR 9/19/05).

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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