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CDL Hospitality Trusts (CDLHT) has refinanced all of its $297 million existing debt maturing in July this year, after securing a new three-year $350 million bank facility from DBS Bank. It will have no further debt to refinance till financial year 2012.
CDLHT posted a 29.9 per cent drop in distributable income for Q1 2009 to $16.5 million. The latter figure is after deducting $1.66 million income that the trust is retaining for working capital. The group had not retained income for working capital in Q1 2008.
Before deducting income retained for working capital, Q1 2009 distributable income was $18.2 million, down 22.9 per cent from the same year-ago period. On this basis, distribution per unit (DPU) fell 23.8 per cent to 2.18 cents.
After deducting income retained for working capital, DPU slipped 31.1 per cent to 1.97 cents, working out to 7.99 cents on an annualised basis. The annualised distribution yield is 13.8 per cent based on CDLHT's closing price of 58 cents yesterday.
Gross revenue fell 19.2 per cent year-on-year to $22.5 million, while net property income declined 21.2 per cent over the same period to $20.6 million.
Revenue per available room for CDLHT's Singapore hotels - Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King's Hotel, and Novotel Clarke Quay - eased 27.7 per cent year-on-year to $150 in Q1 2009.
'In the absence of an economic recovery or pick-up in business and consumer confidence, we are likely to see continued difficult trading conditions and competition is expected to remain intense for the rest of 2009,' said Vincent Yeo, CEO of the trust's manager.
'CDLHT will remain prudent in managing our capital structure, and continue to proactively implement measures to streamline costs and broaden our revenue base to protect our profitability,' he added.
In the event of a major outbreak of the swine flu virus in Singapore, a 'material adverse impact' is expected on the performance of CDLHT. Revenue for 2009 would, however, be protected by minimum rents of around $41 million from lessees for the hotel properties (including rent from Rendezvous Hotel in Auckland, converted based on the exchange rate of NZ$1 = 81.84 Singapore cents) and retail rent of about $4 million from the tenants of Orchard Hotel Shopping Arcade.
The three-year $350 million loan facility that CDLHT has secured comprises a $270 million term loan and an $80 million committed revolving credit facility. The interest rate for the new facility is at the floating Singapore dollar swap offer rate plus interest margin of 2.6 per cent per annum.
As a result of the refinancing, FY2009 DPU is projected to be reduced by about 0.39 Singapore cent per annum compared with FY2008. The new loan facility will be secured by the trust's properties in Singapore, comprising Orchard, Grand Copthorne Waterfront, Copthorne King's, Novotel Clarke Quay and M Hotel.
The loan facility will be used to fully refinance existing debt of $297 million, utilised as at March 31, 2009 and due for refinancing in July 2009. Immediately post-refinancing, debt-to-assets ratio will be 19.7 per cent, one of the lowest in the Singapore property investment trust industry.
In addition, the trust already has in place a $300 million uncommitted multi-currency unsecured bridging loan facility with DBS Bank. The facility can be drawn down in multiple tranches, with a maximum one-year repayment period from each drawn down date per tranche.
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