New Issue Review : HPL 7Y SGD 4%


Issuer:                      Hotel Properties Limited
Status:                      Senior, unsecured
Rating:                      Unrated
Issue / Issue Size:          [TBD]
Format:                      Off the Issuer’s SGD800 million Multicurrency MTN Programme
Tenor:                       7 Year
Initial Guidance:            [4.00%] area, semi-annual, ACT/365 (Fixed)

Nothing much to say about HPL.

MTN programme 800 mio, current outstanding 520 mio.

Comparables would be Guocoland and Wingtai.

Good to see leverage shrinking in the past 2 years. Wheelock Properties’s 20% stake is comforting.

Other than that, it is just the pricing and what else you can buy for 4% for 7 years ? Given their earlier issue this year where they paid 3.5% for 5 years (current price 100.25/100.90 3.44/3.29%), 4% for 7 years is not bad.

I would suggest a switch and not an outright buy. The HPL perpetual trading at 103 level or the 5Y HPL issued earlier this year or if you can get a decent profit on the 10 year Wingtai, HPL could be a consideration for replacement.

No rush here because the property outlook is going to be “reined in”. And HPL should not be allowed to get away with under 3.9%.