SGD New Issue Review : Starhill Global Reit 8Y 3.4%

**NEW ISSUE: STARHILL GLOBAL REIT MTN PTE LTD SGD 8YR – PRICE GUIDANCE**

ISSUER:   Starhill Global REIT MTN Pte. Ltd.
Guarantor: HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Starhill Global Real Estate Investment Trust)
SERIES:  003
STATUS:   Direct, unconditional, unsubordinated and unsecured  Notes
EXPECTED ISSUE RATING:  BBB+ (S&P)
FORMAT:  Reg S, S274 & 275 of SFA, off Issuer’s S$2 Billion Multicurrency Medium Term Note Programme
ISSUE SIZE:   SGD125MM (capped)
TENOR: 8 years
ISSUE DATE: [ ] May 2015
MATURITY DATE: [ ] May 2023
INITIAL PRICE GUIDANCE: 3.40% area
USE OF PROCEEDS: Refinancing and/or for working capital purposes in accordance with the Programme
REDEMPTION FOR TAXATION REASONS: Yes, in accordance with the Programme
PAYMENT:  Semi-annual, actual/365 (fixed)
DETAILS:  SGD250K/Multicurrency Medium Term Note Programme/Singapore Law/CDP
LISTING:  SGX-ST
JOINT BOOKRUNNERS: DBS and RHB
TIMING: This week’s business, as early as today

*STARHILL GLOBAL REIT SGD 8YR – UPDATE 1**

New SGD 8Yr issue announced at initial guidance of 3.4% area, deal is           anchored
Issue Size: S$125 million (capped)
Timing: This week’s business, as early as today

A nice rare name with a good BBB+ rating from S&P which puts it in the same category as the Mapletree’s, FCL and gang while slightly lower than A-Reit (A3) and Capitaland Mall (A2).

Comparing this bond to the recent Mapletree Industrial Trust (BBB+) 8 year 3.02% issue done end April would, however, be UNfair as that was a private placement deal the anchor investor was willing to pay up for. https://tradehaven.net/market/sgd-new-issue-mapletree-industrial-trust-8y-3-02/

Thus perhaps the Mapletree Commercial Trust 8 year deal done back in Jan this year at 3.25% ? Do note that interest rates higher for the 8 year tenor now than in Jan.

In any case, Mapletree Commercial 3.25% 02/2023 is dealing at 100.4/100.8 in the secondary markets which implies yield levels of 3.19/3.13%.

Yet this would be the cheapest funds Starhill has raised, at less than 1% above 8 year interest rates which is 2.45% today. Note that the equity dividend yield is approx. 5.8% and share price is up 9% net of divd this year.

Their previous 7 year issue back in 2014 paid a premium of 1.35% over the swaps giving a coupon of 3.5%.

Still, the market dictates the price and Starhill is not a regular issuer with a nice stable of 12 solid properties with Ngee Ann City at the core (unlike the BBB- reits that have portfolios of scattered holdings all around the place).

And the CEO is related to … our country’s leader.

END OF STORY.