KReit Rights Issue

Announcement
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_B7A21BD601A5379B4825792C003A4AD9/$file/K-REIT_AIP_Announcement.pdf?openelement

Press Release
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_B7A21BD601A5379B4825792C003A4AD9/$file/K-REIT_PR.pdf?openelement

Presentation Slides
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_B7A21BD601A5379B4825792C003A4AD9/$file/K-REIT_Slides.pdf?openelement

Kepcorp Undertaking
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_9A98B594E6EAC8434825792C003EC4BC/$file/KCL_undertaking_final.pdf?openelement



Indicative Timetable

Key Events Dates
Announcement of Acquisition 17 October 2011
Expected date of EGM 10 November 2011(2)
Last day of “cum-rights” trading 11 November 2011
First day of “ex-rights” trading 14 November 2011
Book closure date 16 November 2011
Commencement of “nil-paid” rights trading 21 November 2011
Last day of “nil-paid” rights trading 29 November 2011
Close of Rights Issue 5 December 201
Expected date of issuance of Rights Units 12 December 2011
Expected commencement of trading of Rights Units 13 December 2011
Expected Acquisition completion date No later than 31 December 2011 

Proforma
Acq & Rights Issue
----------------NAV---------DPU------Mkt Cap
B4  ------ SGD 1.48------6.37cts-----3.0m
After ---- SGD 1.19------6.72cts-----4.9m

Rights Issue Price SGD--- 0.85cts
TERP ---- 0.947cts
Dilution due to rights 85%
Updates
Circular
Kreit
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_F00D9A7BCB44FC524825792D0034AE86/$file/Circular.pdf?openelement
Kepland
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_F165295DE798C63D4825792D003901A6/$file/2.KLL.Circular.Disposal.of.87.51ofOPPL.19Oct2011.pdf?openelement

October 20, 2011, 3.02 pm (Singapore time)

K-Reit assigned 'BBB' rating by S & P By YEO AIQI K-Reit Asia, a Singapore-based commercial real estate investment trust, has been assigned 'BBB' long term corporate credit rating by rating agency Standard & Poor's.'The rating on K-Reit reflects our opinion of the real estate investment trust's good-quality assets, solid market position in the Singapore commercial space, and an intermediate financial risk profile,' said Standard & Poor's credit analyst Wee Khim Loy. 'In our view, K-Reit's proposed acquisition of a majority 87.5 per cent stake in Ocean Financial Centre (OFC) from its parent Keppel Land Ltd (not rated) will enhance its business risk profile,' added Ms Loy. The acquisition will double the value of K-Reit's property portfolio to S$5.9 billion by the end of 2011. S & P believes the S$170 million guaranteed rental support from Keppel Land till Dec 31, 2016, will support K-Reit's business risk profile even if the trust is unable to achieve satisfactory leasing of the remaining OFC space. In the unlikely event that the acquisition is not completed, S & P states that the rating on K-Reit will be unchanged. Moreover, K-Reit's property portfolio has a long lease expiry profile, with a high occupancy rate of 98 per cent. This reinforces K-Reit's cash flow stability.

BT
_______________________

My Thots...
Market has been expecting that Kepland will divest OFC to Kreit.
The reasons cited are convincing and makes sense.
Only unknown is the timing.....
Is Mr Market ready for this?

Further thots....
The 99 yr lease is IMHO, not a big factor, since Offices get torn down and rebuilt mostly within that lease period.