CapitaMalls Asia Limited – Third Quarter Results and New IPO Bonds

I wrote a post on 3 April 2011 about CapitaMalls Asia’s (CMA) financial performance for financial year ended 31 December 2010 (FY2010).

From the time of IPO when the share price was $2.12, its share price ended at $1.94 in FY2010. Since then, CMA share price continues to tumble and is currently trading at $1.17.

The third quarter result ended 30 Sep 2011 showed the group’s net profit dropped 30.3 percent from the corresponding quarter in 2010.

In terms of loans and borrowings as at 30 September 2011, they had gone up significantly compared to 31 December 2010:

 – Repayable in one year $237m vs $12m

  Long-term borrowings $730m vs $687m (+6.2%)

Cash and cash equivalents dropped by half to $625m from $1,318m (-52.5%)

IPO Bonds

Exactly one year ago, CMA offered S$200 million bonds for public subscription comprising (a) S$75 million of 1.00 per cent interest bonds due one year after in 2012 (b) S$125 million of 2.15 per cent interest bonds due three years after in 2014. I wrote on this in my post dated 16 January 2011.

CMA is offering new IPO bonds again.

The new IPO Bond offer of up to S$200 million bonds comprises:

(a) up to S$100 million in aggregate principal amount of callable step-up bonds due 2022 (10-year maturity) at the issue price of 100 per cent to the public in Singapore

(b) up to S$100 million in aggregate principal amount of callable step-up bonds due 2022 (10-year maturity) at the issue price of 100 per cent to institutional and other investors.

The interest rate is 3.8 per cent per annum for first 5 years. If the bonds are not redeemed or purchased and cancelled by the end of 5 years, the interest rate is stepped up to 4.5 per cent until maturity.

The interest rates of the new IPO Bonds had increased reflecting the need to price it right for investors to bite.

As in all bonds, there are risks to investors. Some risks are the credit ratings of CMA and business operation prospects of CMA. The new IPO bond is not rated by credit ratings agencies.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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