Mapletree Logistics Trust (MLT) announced the launch of a private placement last night and subsequently announced results of the private placement this morning. It will issue 309.9m new units at an issue price of S$1.210 per unit (out of an initial range of S$1.196 to S$1.234), for total gross proceeds of S$375.0m. The private placement was ~2.4x covered.

The announcement does not come as a surprise to us given MLT’s proposed acquisition of 5 ramp up warehouses from CWT in Singapore and we believe the market was already expecting some form of equity fund raising as partial funding. Indeed, the bulk of the proceeds will be used to fund the proposed acquisition.

Pro forma FY18 DPU is expected to increase by 4.2%, but this is assuming an issue price of S$1.215 and gross proceeds of S$375m. Given that the issue price was lower, then DPU accretion will correspondingly be lower.

For now, we maintain our BUY rating and fair value of S$1.34.

Source: OCBC Research - 20 Sept 2018