SGD New Issue Review : MAPLETREE COMMERCIAL TRUST SGD 8-YR

** NEW ISSUE: MAPLETREE COMMERCIAL TRUST SGD 8-YR – INITIAL GUIDANCE 3.3% AREA **

ISSUER: Mapletree Commercial Trust Treasury Company Pte. Ltd.
GUARANTOR:  DBS Trustee Limited (in its capacity as trustee of  Mapletree Commercial Trust)
STATUS:  Direct, unconditional, unsubordinated, unsecured Notes
ISSUER RATINGS:          Baa1 / – / –
EXPECTED ISSUE RATINGS:  Baa1 / – / –
ISSUE SIZE:   TBA
FORMAT/DOCS: Bearer / Issuer’s SGD1 billion Multicurrency Medium Term Note Programme
INITIAL PRICE GUIDANCE:  3.30% area
TENOR:  8-year
INTEREST PAYMENT:  Semi-annual, actual/365 (fixed)
ANNOUCNEMENT DATE:  23 January 2015
DENOMINATION:   SGD250K
GOVERNING LAW: Singapore Law
LISTING:  SGX-ST
CLEARING:  CDP
SELLING RESTRICTIONS:    As per Information Memorandum dated 8 August 2012,   including the Singapore selling restrictions under Sections 274/275 of the Singapore Securities and  Futures Act

This is what the 8 year interest rate curve looks like. We are at an 18 month low.

8Y sgd irs

A credit premium of 1.415% for 8 years is much better than the 1.15% Mapletree Greater China (rated Baa1) paid last year for their 7 year 3.2% 09/2021 issue and the 1.32% Capitaland (unrated) paid for their 10 year 3.8% 08/2024 issue.

I also recall about a year ago, Capitamall Trust (A2) paid just 0.96% premium for their 7 year retail bond issue to give a coupon of 3.08%.

In all a fair spread for an investment grade paper regardless of the current interest rate.