ESR Reit (former Cambridge Industrial Trust)

[BlackCat]

I did an analysis of Cambridge several months ago. Although I liked the yield and its tennant's long leases, which offer some stability, I decided not to buy yet as its funding is uncertain.

[millionairemind]

Hello Blackcat,

A very warm welcome to you from the guys at huatopedia.

I guess that you are a FA guy and I welcome you to post your views on any stocks based on your analysis so that we can learn from you.

I hope to learn more from you in the months to come and we look forward to your many posts in the future.

Huat ar,
mm

[ichew]

hi blackcat

CIT manage to refinance their 390m at 6.6%
and the impact CIT says is reduction by approximately 0.9 cents per unit per annum

from their 3Q08, their wtd avg effective int rate was 3.2%

CAMBRIDGE INDUSTRIAL TRUST TO REFINANCE WITH S$390.1 MILLION TERM LOAN
http://info.sgx.com/webcoranncatth.nsf/ ... C00380935/

the effective int rate = 6.6% per annum
is this consider high?

DPU impact = anticipates reduction by approximately 0.9 cents per unit per annum.
is this reasonable?

estimated annualised DPU = 5.9 cents
so now estimated DPU = 5 cents
assume DPU drop another 20% = 4 cents for watever reasons
so assume it goes up to 0.24, then still abt 16% yield ... erm good buy?

read also (in the other forum) tat their net income per annum is only abt 6% too
hmmm seems like 6.6% int rate is kinda high
but still now up to abt 0.23

[BlackCat]

Hi ichew,

Indeed it is good news! But note that it may not be complete yet: "A portion of the Loan is subject to syndication on normal market conditions" - I don't know if this is meaningful or just some standard finance clause banks put on all their contracts. Anyway, as a retail investor, I wouldn't put all my money into one stock no matter how attractive.

Is the 0.9c deduction in DPU resaonable? Based on Q3 results (at old interest rate - I used 3.1%), annualised operating profit would have been 45.6m, or 5.7c per share. I get a operating profit of 31.6m (at new interest rate, 6.6%), or 3.95c per share. I'm using 800m shares. So I get a reduction of about 1.75c/DPU. Not sure why theres a difference between what I get and what the management stated.

Alternatively, I get 3c/share yield, after (conservatively) chopping off 10% revenue due to recession. This is the number I'm using. Based on this, I'm holding my shares.

Yes, 6.6% is kind of high, but at least its a number.... no need to guess anymore. Only concern for us is whether they can do business with this number. Anyway, Frasers Centerpoint trust has had its rating downgraded by Moodys, A-Reit may be downgraded, so their borrowing costs may rise too. No more cheap money....

[market-uncle]

Hi,
I do hope the refinance will go through eventually, else the management would not announce it.

Anyway, from my estimation, 6.6% effective interest rate on 390.1m of debt will increase quarterly borrowing cost by 3.5m. The resultant DPU per quarter will be about 1.067cts or annualised 4.269cts (1.691 cts reduction vs management's estimation of 0.9cts). Base on this, I got in again at 22.5 cents, or yield of about 18.97%, reasonably high for the risk involved.

[ichew]

thanks blackcat and market-uncle for taking time to explain this

CCT is another one tat needs to have their refinancing settled
hopefully their int rate will be lower

[millionairemind]

February 18, 2009, 12.46 pm (Singapore time)

Cambridge Industrial Trust fully draws down $390m loan
SINGAPORE - Cambridge Industrial Trust Management (CITM) on Feb 18 announced that it has successfully completed and fully drawn the $390.1 million syndicated term loan transaction announced in Dec 2008.

Proceeds have been utilised to refinance all of Cambridge Industrial Trust's existing debt facilities.

'The key terms of the loan remain as per the previous announcement other than a small increase in the effective interest rate resulting from the settlement and amortisation of a now ineffective part of the previous interest rate swap.

This rate will now be approximately 7.2 per cent and correspond to a distribution per unit impact for 2009 of approximately 1.2 cents per unit,' CITM said in a regulatory filing to Singapore Exchange.

In its Dec 2008 announcement, CITM had indicated an effective interest rate of about 6.6 per cent per annum, including amortisation of upfront costs; it also said then that it anticipates the trust's DPU in 2009 to be reduced by about 0.9 cent per annum, adding that amortisation of upfront costs does not affect the level of distributions to unitholders.

The syndicated term loan has a three-year tenor from drawdown.

CITM CEO Chris Calvert said in the latest announcement that the trust's investors can 'now enjoy the certainty arising from 100 per cent of the trust's debt being fully funded for the next three years'. -- BT NEWSROOM

[ichew]

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

hmmm wonder why cambridge went to sign the option when they have not confirmed the loan.
assuming option fee is 1%, it will be $5.52m down the drain

[winston]

Not vested. From Phillips:-

Cambridge Industrial Trust – Results (Lee Kok Joo)
Recommendation: HOLD
Previous close: S$0.465
Fair value: S$0.48


Full year revenue of $74.4 million, net property income of $65.1 million, distributable income of $44.2 million.
4Q09 DPU of 1.38 cents, bringing full year DPU to 5.36 cents.
Total asset value of $874.2 million.
Maintain hold recommendation, fair value raised from $0.41 to $0.48.

[Chinaman]

Today pocket kopi money from Cambridge qtrly dividend of $485…bot during ipo period ‘boh peng’ capital cost aro 26k my yield is 7.3% ….but capital loss 20%, bad investment leh….so how? Laminate the script treat it as annuity for retirement income…buy n hold till retirement, heehee.