MOODY'S ASSIGNED PROSPECTIVE RATING (P)Aaa TO CAPITAMALL TRUST CMBS DEAL
US$73 Million and Approximately S$224 Million Asset-Backed Securities Rated.
Hong Kong, June 06, 2003 -- Moody's has assigned prospective rating of (P)Aaa to the US$73
million Series 018 floating rate notes (the Series 018 notes) and the
S$52 million multi-series revolving facility (the facility)
to be issued by a secured medium term notes program (the MTN program)
of Silver Maple Investment Corporation Limited (the issuer). At
the same time, Moody's also assigns a definitive public rating Aaa
to the S$172 million Series 001 fixed rate notes (the Series 001
notes) issued by the Issuer in February 2002. Moody's assigned
a private Aaa rating to the Series 001 notes at the time it was issued.
The complete rating action is as follows:
Issuer: Silver Maple Investment Corporation Limited
S$172,000,000 Series 001 fixed rate notes due 2008,
US$73,000,000 Series 018 floating rate notes due 2011,
S$52,000,000 multi-series revolving facility
of the MTN program due 2011, rated (P)Aaa
The definitive rating addresses the timely payments of interest and the
ultimate repayment of principal at par of the Series 001 notes by the
legal repayment date in August 2008 and the prospective ratings address
the timely payments of interest and the ultimate repayment of principal
at par of the Series 018 notes and the facility by the legal repayment
date in December 2011.
Moody's considered the following factors when assigning the above definitive
and prospective ratings:
1. Moody's assessment of the value and quality of underlying properties;
2. the overall Moody's LTV of 37.65% and DSCR of
2.12X based on Moody's assumed loan constant;
3. the cross currency swap to mitigate the currency mismatch associated
with the US$-denominated Series 018 notes and the corresponding
S$-denominated credit facility;
4. the restrictions on the borrower's activities as a Real Estate
Investment Trust in Singapore;
5. the experience of CapitaLand Retail Management Pte. Ltd.
as the property manager;
6. the legal and structural integrity of this transaction.
Moody's ratings address only the credit risks associated with the transaction.
Other non-credit risks, such as those associated with the
timing of principal prepayments and the payment of prepayment penalties,
have not been addressed and may have a significant impact on the yield
The issuer of the MTN program, Silver Maple Investment Corporation
Limited, has entered into a credit facility agreement with CapitaMall
Trust (CMT, the borrower, formerly known as SingMall Property
Trust), under which the issuer will issue notes to finance CMT's
acquisitions of commercial properties in Singapore and to fund CMT's routine
capital expenditures and day to day working capital requirements.
Each series of notes issued out of the MTN program will match the term
of each credit facility advanced to the borrower. In addition to
the Series 001 notes and the Series 018 notes, the issuer may also,
from time to time, issue fixed rate and floating rate notes with
an aggregate outstanding principal amount of not more S$52 million
under the facility of the MTN program.
The credit facilities advanced by the issuer will be supported by mortgages
over the properties. The issuer will also be benefited from the
assignment to the credit facility trustee of the borrower's right,
title and interest in the tenancy agreements, management agreement,
the insurance policies, the insurance proceeds, and rental
collection accounts. A first floating charge is also placed on
certain other assets of the borrower.
In turn, as security for the notes, the issuer will grant
a debenture to the note trustee creating a fixed and floating charge over
its assets and its interests, rights and other benefits under the
transaction documents related to the credit facilities for the benefits
of the noteholders and other secured parties.
As at June 5, 2003, the borrower owns 3 commercial properties
in Singapore with an aggregated appraisal value of S$935 million.
The acquisition of these existing properties was partially financed by
the S$172 million Series 001 notes in February 2002, while
the borrower's working capital needs were supported by the S$50
million facility of the issuer.
The borrower intends to purchase its fourth property which had an appraisal
value of S$280 million as at February 1, 2003. In
order to partially finance the borrower's acquisition with an S$125
million credit facility, the issuer needs to issue US$73
million Series 018 notes. The issuer will enter into a cross currency
swap to mitigate the risk of currency mismatch between the S$-denominated
credit facility to be advanced to the borrower and the corresponding US$
denominated Series 018 notes to be issued by the issuer.
The issuer also increases the S$50 million facility to S$52
million. Since the borrower's working capital and capital expenditure
needs may fluctuate over time, the issuer may need to issue multiple
series of short term notes of various amounts out of the facility from
time to time. Moody's perspective (P)Aaa rating assigned to the
revolving loan facility is only applicable to an aggregate outstanding
principal amount of the facility up to S$52 million.
The Series 018 notes and the facility to be issued will also rank pari
passu with the outstanding Series 001 notes.
The legal repayment dates of the Series 001 notes and Series 018 notes
are one and half years beyond the expected maturity date of the corresponding
credit facility. The tail period for the short term notes to be
issued out of the facility cannot be less than one and half years either.
In the event of a default in the credit facility, the issuer will
have an enforcement period to liquidate the properties to pay down the
notes. Given the limited supply of retail properties and the lender-friendly
environment in Singapore, the length of the tail period is deemed
sufficient for realizing the value of the properties.
A more detailed analysis of the transaction will soon be available at
Moody's web site in the Pre-Sale Reports section: http://
Silver Maple Investment Corporation Limited (the issuer) is a special
purpose company incorporated with limited liability under the laws of
Singapore and was formed solely to enter into the current transaction.
The shares of the issuer are held on behalf of a charitable trust.
The borrower, CMT, is the first listed real estate investment
trust (REIT) in Singapore, established pursuant to a trust deed
in 2002 and regulated by the Companies Act and the MAS Guidelines for
Property Trusts (issued by the Monetary Authority of Singapore in 1999).
Launched in 2002, this vehicle invests in income-producing
commercial properties in Singapore with shopping center as a predominant
CapitaMall Trust Management Limited, the manager of CMT, is
an indirect wholly-owned subsidiary of CapitaLand Limited,
one of the largest listed real estate companies in Southeast Asia.
Moody's Investors Service is a publisher of rating opinions and research.
It is not involved in the offering or sale of any securities, nor
is it acting on behalf of the offering party. This release is not
a solicitation or a recommendation to buy, hold or sell securities.
Michael M. Ye
Structured Finance Group
Moody's Asia Pacific Ltd.
Asst Vice President - Analyst
Structured Finance Group
Moody's Asia Pacific Ltd.