CapitaLand Trust unveils $600m placement to finance Paragon deal

New units are priced at 2.7% to 4.3% discount.

CapitaLand Integrated Commercial Trust (CICT) is raising at least $600m through a private placement of new units to institutional, accredited and other investors to help fund its planned acquisition of Paragon, a freehold mixed-use asset at 290 Orchard Road, Singapore.

CICT’s manager, CapitaLand Integrated Commercial Trust Management Limited, said in a company statement that the issue price will be set between $2.292 and $2.332 per unit. This represents a 2.7% to 4.3% discount to the last traded volume-weighted average price of $2.3955 on 17 April.

Citigroup Global Markets Singapore, DBS Bank, J.P. Morgan Securities, OCBC, and UOB are acting as joint bookrunners and underwriters with the placement being fully underwritten, subject to regulatory and SGX-ST approval.

About $590.9m, or 98.5% of proceeds, will fund the Paragon acquisition and related costs whilst the remaining $9.1m will go to transaction expenses.

Any surplus may be used for general corporate purposes, including future investments or debt repayment if the deal does not proceed.

The issuance will be carried out under a general mandate expected to be approved at CICT’s annual general meeting (AGM) on 22 April where unitholders will vote on key trust matters, including the authority to issue new units.

The new units will not exceed 3.43% of total units in issue and are within the expected mandate limits with listing on the Singapore Exchange is targeted for 29 April.

An advanced distribution of 3.93 to 4.03 cents per unit will be paid to existing unitholders for income earned before issuance. New units will not be entitled to this distribution but will rank equally thereafter.