SGD New Issue Review : Mapletree Greater China Commerical Trust 7Y

MAPLETREE GREATER CHINA COMMERCIAL TRUST SGD 7YR

– New Mapletree Greater China Commerical Trust SGD 7yrs announced
– Expected issue rating: Baa1 (Moody’s)
– Initial price guidance: 3.30% area
– Timing: This week’s business, as early as today

Comps:

CCT 2.98 02/2021 (Baa1 by Moody’s) – 100.50, 2.90%
Mapletree Industrial Trust 3.75 2019 (BBB+ by Fitch) – 104.50, 2.68%
Mapletree Industrial Trust 3.65 2022 (BBB+ by Fitch) – 101, 3.50%

This was the largest IPO of 1H13 last year, launched to great fanfare, hype and expectations with its unique ticker as MAGIC on Bloomberg. It’s stock price rose, as expected for all government linked IPOs, and tanked and tanked even more before recovering to cost currently.

[Deal stats : 8.9 times oversubscribed on retail tranche and 38.1 times oversubscribed on the institutional tranche]

Ironically, it is the famous Festival Walk, that forms half its portfolio of 2 assets, that had its roof collapse right after the MAGIC ipo in March that people remember.

MAGIC STK PRICE

Market cap SGD 2.53 bio
Dividend yield 6.59%
MTN Programme Size USD 1.5 bio to include perpetual securities
Total Debt/Total Assets Ratio 38.63%

Occupancy at Festival Walk at 100% and Gateway Plaza in Beijing at 97.5%.

What is there to say ?

MAGIC is boleh !

Compared to its peers, MAGIC 7Y at Baa1 rating yielding 3.3% is decent. Unless you were lucky enough to load up on Capitamall retail tranche earlier this year at 3.08% for its A2 rating which is trading at 101.25/101.8 (2.87/2.77%) now.

I do not think retail investors will take much interest in this paper though, which is a pity but the dividends do look much better for the time being even though I am no big fan of commercial and retail real estate.

For institutional investors, this is an improvement over Suntec 3.35% 02/2020 launched earlier this year and is yielding 2.96/2.87% currently for its Baa2 rating which is definitely on account of the China exposure.

My verdict : Good timing for the issuer and there will be more to come.