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hmm...looks like all dumping MapleTreeLog at 89cts now to apply for this IPO at 88cts har?? hee...... :P
Typically REITS have a mandate to borrow up to 35%. (or 60% if the REIT has a rating). So normal for REITS to have gearing of 20+ to 35%. (or 40+ % if it has a rating).
Hence, 25% borrowing is normal and it will roll over the borrowing when due. In fact, it make sense for REITS to borrow to enhance yield. Current cost of borrowing for REITS about 3 to 3.5% and the property yield is probably about 7% or more.
The comparables to MCT is probably Suntec (yield 6.13%), Capitamall Trust (yield 5.02%) and Starhill Global (yield 6.06% ), since Vivocity (retail) is a large part of the MCT now.
hope some body can give us a better explanation
coolraider ( Date: 20-Apr-2011 00:17) Posted:
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maybe yes and maybe no.. I dont know... but i know it is not worth investing.. looking at risks vs gain...
Blackwolf ( Date: 20-Apr-2011 09:10) Posted:
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Refinancing.
coolraider ( Date: 20-Apr-2011 00:17) Posted:
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I extracted this comment in HWZ forum on Mapletree Commercial..
" Soul77 wrote:
I'm trying to learn here.
I looked at the Prospectus, the 39% gearing is due to their initial debt facility of 1.1 Bil right?
Then I saw that 25% of the debt need to be paid within 2 years. This is more than 250M. Then, looking at their net income of around 90M per year, this doesn't make sense at all. How are they going to pay that 250M within 2 years when their income will be distributed to the unitholder? "
I wonder any familiar with Business Trust to comment on this?
Going to apply for it!