CapitaMalls Asia: Triangle resolved.

CapitaMalls Asia's triangle has resolved itself to the upside, breaking resistance at $2.14, reaching a high of $2.18 before closing at $2.17.  Volume expanded nicely as well. The MACD has crossed into positive territory while the MFI formed a higher high.  The OBV has turned up slightly too.

Immediate resistance is at $2.19, an important support level created in February this year. The declining 100dMA is another resistance level at $2.21.  This coincides with another downtrend resistance line with its peak on 12 March 2010. So, the resistance band from $2.19 to $2.21 is likely to be a strong one. 

The rise in price today probably galls people who have cut their losses or taken profits earlier at lower highs but is a boon for people who have been holding on to their shares.  It is probably also tempting for some to go long now thinking that we are seeing the start of a new uptrend.

What do I think? Well, although volume expanded today, technically, I still see a negative divergence between price and volume.  This does not mean that price cannot go higher. However, the upside might be limited by the resistance band from $2.19 to $2.21. The MFI has been forming higher highs and higher lows and at 71.3% is not far from the overbought region.

Saizen REIT: Refinancing of loan from Soc Gen.

The Board of Directors of Japan Residential Assets Manager Limited, the manager (“Manager”) of Saizen Real Estate Investment Trust (“Saizen REIT”), wishes to announce that Godo Kaisha Choan (“GK Choan”), a TK operator of Saizen REIT, has entered into a facility agreement on
15 June 2010 with Societe Generale (the “Facility Agreement”) for the refinancing of its JPY 5.9 billion (S$90.2 million1) loan (the “Refinanced Loan”), which was originally obtained from Societe Generale and due to mature in July 2011. The completion of the Facility Agreement and related loan documents are subject to the fulfillment of the conditions precedent, such as the registration of mortgages of the properties.

The Refinanced Loan is for a term of 3 years up to 15 June 2013. The refinancing terms include the collateralisation of the property portfolios of two TK operators of Saizen REIT, namely GK Choan and Yugen Kaisha Kokkei (“YK Kokkei”), as security for the Refinanced Loan. The property portfolios of GK Choan and YK Kokkei are valued at an aggregate of JPY 11.8 billion (S$180.4 million) based on valuations as at 30 April 2010. The Refinanced Loan is non-recourse to Saizen REIT.

Although the Refinanced Loan is subject to a variable interest rate, GK Choan intends to enter into an interest rate swap arrangement to fix the annual interest rate on the Refinanced Loan throughout its term. Further details on the applicable interest rate will be announced when it is fixed. The Refinanced Loan also has an amortising feature with an initial principal repayment of JPY 140.5 million (S$2.1 million) in June 2010 and quarterly principal repayments of JPY 40.5 million (S$0.6 million) thereafter. Societe Generale will also charge an up-front fee of JPY 59.0 million (S$0.9 million).

The Management Team is pleased with the successful refinancing of this loan as it enables Saizen REIT to further strengthen its capital structure. Particularly, in view of recent financial turmoil in Europe, the risk appetite of international lenders has become less predictable. The Management Team deems it prudent to refinance this loan, which is Saizen REIT’s second largest loan, as soon as possible while the opportunity remains open. Other than the JPY 7.1 billion (S$108.6 million) loan of YK Shintoku (which is currently in maturity default) and the JPY 0.45 billion (S$6.9 million) loan of GK Chosei, Saizen REIT has no further loans that are due to mature in the next two financial years. This will allow the Management Team to focus on the refinancing of the loan of YK Shintoku.

Saizen REIT’s silent partner secures $90m refinancing loan from Societe Generale. The refinanced loan is for a term of three years up to 15 June 2013.
Tuesday, 15 June 2010

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