Property developer Soilbuild Group Holdings is set to issue $60 million worth of convertible bonds aimed at tapping the bullish market sentiment.

Property developer Soilbuild Group Holdings is set to issue $60 million worth of convertible bonds aimed at tapping the bullish market sentiment.

The company expects strong investor interest to facilitate the long-term expansion of its capital base and support its future growth. Soilbuild plans to use the net proceeds from the bond issue to finance new investments, acquisitions and development of new land sites for residential and business properties.

The issue includes an over-allotment option of $10 million to be exercised to meet the strong demand from institutional investors. The four-year bonds will bear a yearly coupon rate of one per cent payable half yearly and are convertible into new Soilbuild shares at $2.0182 each, representing a 28 per cent premium above the 30-day volume weighted average price of Soilbuild shares.

It is also the first unsecured corporate debt issued by the company, which has been listed on the Singapore Exchange since 2005.

Soilbuild’s chief financial officer, Then Chee Tat, believes that this corporate debt, which is the longest maturity period extended to the company, represents a vote of confidence in its financial prospects and is in line with its long-term goal of equity capital expansion.

‘The use of convertible bonds for funding enables us to broaden our funding base and better manage our capital structure by tapping both the debt and equity capital markets,’ Mr Then said.

Soilbuild has won numerous industry awards since 1998 and has a track record of over 30 years. With the success of numerous prime residential projects and the recent completion of a business park in Changi under its belt, Soilbuild’s executive director Low Soon Sim believes the company is well positioned in the current residential property cycle.

‘Moving ahead, we will use the funds raised to selectively acquire and develop new residential sites and to continue building up our portfolio of business space properties where we believe has good potential for growth,’ said Mr Low.

Soilbuild’s market cap stood at about $363 million at closing yesterday.

Standard Chartered Bank is the sole book-runner and lead manager for the bond issue.

Source: The Business Times, 11 July 2007