Daily news - 7 Jan

CCT Secures Refinancing for S$580 million CMBS Due March 2009
CapitaCommercial Trust (CCT) has entered into a facility agreement with DBS, Standard Chartered Bank, UOB and The Bank of Tokyo-Mitsubishi UFJ, Ltd, for a secured three-year term loan of up to S$580 million for CCT. The term loan will be drawndown in March 2009 to refinance the borrowings under the S$580 million commercial mortgage-backed securities (CMBS). The CMBS is secured by the seven properties in the initial portfolio. However, the term loan will only be secured by Capital Tower. As a result, out of CCT’s portfolio of eleven properties, eight properties with a total asset value of S$2.8 billion will be free of any encumbrance. This will provide CCT with financial flexibility in managing its capital and balance sheet. The all-in interest cost is well within CCT's projections. In addition, CCT has decided to abort the redevelopment of Market Street Car Park into a Grade A office/commercial building. Although the Manager had stated in April 2008 that the decision on the planned redevelopment would be made only after mid-2009, the Manager after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, has decided to abort the project immediately. CCT's CEO Ms Lynette Leong said the move will also give assurance and security of tenure to the car park users as well as retail tenants. CCT can move on to enter into longer term leases and adopt longer term plans through repositioning the retail tenant mix and other promotional events or activities to inject vibrancy to the area.

SGX posts record derivatives trades
Singapore Exchange (SGX) – Derivative and exchange-traded funds (ETFs) on the SGX set new trading records in 2008. Total derivatives volume hit nearly 62 million contracts, up by almost 38% compared to the previous period mainly due to a more than eight-fold surge in the number of CNX Nifty Index futures contracts to 12.4 million contracts from 2007's 1.44 million contracts. Other key future contracts - the Nikkei 225, MSCI Taiwan and MSCI Singapore recorded double- digit percentage growth.SGX added that turnover in the total futures and options market for the first nine months of 2008 alone had exceeded full-year 2007 figures followed by a record month in October when 6.86m contracts were traded. Hong Kong also hit records in the derivatives market in 2008 when it registered a record 101 million in volume up to Dec 15, 2008 based on data on its website showed. As for ETFs, total trading value in 2008 more than double to S2.94bn from 2007.

Applications for Spring loans up 3-fold: DBS
DBS which is one of Spring’s participating financial institutions for the Local Enterprise Finance Scheme, Micro Loan and Bridging Loan programmes said that the applications for Spring loans was up 3-fold since enhancements kicked in on Dec 1 2008. Most applications have been to 'top up' existing loans. The maximum quantum under the Micro Loan programme, for instance, has been increased from $50,000 to $100,000. And the government's share of the default risk has increased to 80 per cent from 50 per cent. According to DBS managing director and head of enterprise banking Edwin Khoo, DBS is taking steps to ensure credit lines remain open. All cases in which credit lines are reduced or closed must be assessed by senior management including himself. And so far, there have only been a 'handful' of such cases. DBS's share of the SME market has been growing. In 2008, its loan book grew more than 25 per cent. SMEs account for 95 per cent of all enterprises, employing some 60 per cent of the nation's work force and generating about 45 per cent of the gross domestic product in Singapore.

SATS union, independent directors okay SFI buy
Singapore Airport Terminal Services (SATS) has got the nod from its independent directors (IDs) and in-house union to buy mainboard-listed Singapore Food Industries (SFI). In a circular to shareholders on Monday night, the mainboard-listed airport services specialist said that seven of its eight IDs voted in favour of the SFI takeover. The other ID, Ng Kee Choe, abstained because he is on the advisory panel of Temasek Holdings, which is selling its SFI stake to SATS. SATS also received irrevocable undertakings in support of the deal from SATS Workers' Union, directors and senior management, who together control about 1.82 per cent of the total minority shareholdings in SATS. In its circular, SATS said that buying the region's largest integrated food supplier would help it achieve sustainable growth powered by the twin engines of airport operations and food services. SFI is a stable business with Singapore government contracts such as supplying food to the armed forces and access to the national food security programme, SATS noted. Also, through SFI's presence in Europe and the UK, SATS sees potential to expand into European airline catering. SFI's UK business has been growing at 14-19 per cent per year. The enlarged SATS, with SFI under its umbrella, would enjoy stronger growth and a bigger geographic footprint and would be less exposed to the vagaries of the aviation sector.

Ex-S'pore Computer Systems chief rejoins StarHub
StarHub – Former Singapore Computer Systems (SCS) president and CEO Tan Tong Hai has rejoined StarHub after parting ways with the company for more than eight years. From Jan 15, Mr Tan will be StarHub's new chief operating officer (COO), a position that has been vacant for the past two years. He will report directly to company CEO Terry Clontz, StarHub said in a regulatory filing yesterday. The COO role was vacated by Yong Lum Sung, the former chief of Singapore Cable Vision, in December 2006. StarHub said at that time that it was not looking to replace Mr Yong. Instead, it chose to change the reporting structure for departments that used to be under the COO's charge. Mr Tan is no stranger to StarHub, having been general manger of its Internet arm from 1999 to 2000. During that time he helped launched the firm's famous 'surf-for-free' dial-up Internet package, a move that caused serious damage to rivals Pacific Internet and SingNet.

Source: Kim Eng