GLP prices S$500m perpetual bond at 5.5%: Term sheet

Singapore-listed Global Logistic Properties (GLP), which manages logistics facilities in China and Japan, has priced a S$500 million perpetual bond issue at a 5.50 per cent coupon, according to a term sheet seen by Dow Jones Newswires yesterday.

The bond was priced at 420 basis points above the Singapore offer rate. JP Morgan Chase was the global coordinator and bookrunner. Citigroup, DBS and Goldman Sachs were also bookrunners.

GLP shares ended unchanged at S$1.82 each yesterday. CIMB Research has a “Outperform” call on GLP with a S$2.24 price target, at parity with its revalued net asset value. It said catalysts include higher rents, accretive capital deployment and potential asset spin-offs.

“GLP is about scalability – leveraging its size and network to multiply its tenant base. It has unique exposure to China’s growth, backed by stable Japan cash flows and a highly competitive capital structure. We deem it a consumer play with a real estate kicker,” CIMB said.

CIMB estimates GLP’s core earnings before interest and taxes will rise 29 per cent to US$520 million (S$667.3 million) by FY2014 from FY2011 on stable rents in Japan and a growing China portfolio.

Operating cash flows are expected to cover known capital expenditure needs while “a high cash conversion rate allows available surpluses to be swiftly redeployed for new investments”, it added.

Source : Today – 2 Dec 2011

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