Analyst Note| Lorraine Tan, CFA |
Narrow-moat CapitaLand Integrated Commercial Trust, or CICT, announced that they had made payment for the redemption in full of a SGD 100 million Medium Term Note, or MTN, that matured on Aug. 13, 2021. The MTN was a fixed rate note with an interest rate of 2.96% per year. Accordingly, we expect slight improvements to CICT’s financial position with aggregate leverage improving from 40.5% to 40.1%. In addition, we expect borrowing costs to decline moving forward as we observe that CICT had been refinancing their existing debt this year via issuance of MTNs at a lower borrowing cost--with two MTNs issued at an interest rate of 2.1% and 2.15% whilst redeeming two other MTNs that carry interest rates of 2.98% and 2.27%.