Ascendas Hospitality Trust

[felixleong]

now is a very bad time for them to raise $$

[KopiKat]

LAUNCH OF EQUITY FUND RAISING TO RAISE NO LESS THAN S$200.0 MILLION TO PARTIALLY FUND THE ACQUISITION OF PARK HOTEL CLARKE QUAY

Some extracts,

(i) private placement of 161,947,000 New Stapled Securities at an issue price of between S$0.885 and S$0.915

(ii) a pro-rata and non-renounceable preferential offering of 64,405,625 New Stapled Securities on the basis of 2 New Stapled Securities for every 25 existing stapled securities in A-HTRUST at an issue price of between S$0.880 and S$0.905

....the Managers intend to declare an advance distribution for the period from 1 April 2013 to the day immediately prior to the date on which the New Stapled Securities are issued pursuant to the Private Placement (the “Advance Distribution”). The Advance Distribution is estimated to range from 0.95 cents to 0.99 cents....

RESULTS OF PRIVATE PLACEMENT AND PRICING OF NEW STAPLED SECURITIES UNDER THE PRIVATE PLACEMENT AND PREFERENTIAL OFFERING

The issue price per New Stapled Security under the Private Placement has been fixed at S$0.885 per New Stapled Security (the “Private Placement Issue Price”) as agreed between the Managers and the Joint Bookrunners, following a book building process and the issue price per New Stapled Security under the Preferential Offering has been fixed
at S$0.88 per New Stapled Security (the “Preferential Offering Issue Price”).

[pacyfiq]

Sorry for this stupid question but i don't understand what is "Non renounceable". Does it mean that the broker gonna take money automatically on the account? No right issue?

[AlphaQuant]

Sorry for this stupid question but i don't understand what is "Non renounceable". Does it mean that the broker gonna take money automatically on the account? No right issue?

meaning one cannot sell the rights to someone else. if one doesn't want to cough up the $, the rights will lapse and one's holdings will be diluted.

[felixleong]

just remember this was IPO-ed a year back at 88 cents, now its back to square one, omg

[KopiKat]

just remember this was IPO-ed a year back at 88 cents, now its back to square one, omg

I found it attractive to apply for the IPO and even buy more after it got listed and prices dropped below issue price back then as Yield was close to 8% and A$ was strong (most of assets in Australia). Have since divested due to my fears of this current Equity Fund Raising.

Now that share price is back to square one, it's beginning to look attractive again to me. The key difference is A$ is now weak and market sentiment is also weak (meaning availability of other more attractive alternatives).

Will continue to watch and learn. May even get vested again depending on....???

---

Key dates,

[Image: izyjhc.jpg]

[evolance]

The key difference is A$ is now weak and market sentiment is also weak (meaning availability of other more attractive alternatives)

Will continue to watch and learn. May even get vested again depending on....???

I am also looking at this reit with its attractive price/yield. My supporting thoughts are that with hotels located in Perth, Sydney, would they gain more from increases in tourists and room rate due weak AUD than the loss in exchange rates?

Your thoughts?

[KopiKat]

The key difference is A$ is now weak and market sentiment is also weak (meaning availability of other more attractive alternatives)

Will continue to watch and learn. May even get vested again depending on....???

I am also looking at this reit with its attractive price/yield. My supporting thoughts are that with hotels located in Perth, Sydney, would they gain more from increases in tourists and room rate due weak AUD than the loss in exchange rates?

Your thoughts?

First of all, a minor point of correction is they don't have any hotel asset in Perth. For Australia, the hotels are located in Sydney, Melbourne, Brisbane & Cairns.

As for the impact of a weak A$ resulting in stronger tourist arrivals, I suppose it's always a possibility. But, looking at the International Visitor Arrivals figures for the past 10 years from their presentations pg 39-46, I don't feel very optimistic that the increase (if any) will be very significant. The other variable you may want to consider is the 'Additions to Hotel Room Supply' (also in presentation slides) which'll also affect their ability to raise room rates. Further, AH-Trust hotels are also targeted at business customers and the softening of the Australia economy (one reason why A$ is weakening) will have a negative impact for this segment.

To be frank, I don't spend much time doing such analysis as it'll give me a headache (so many different variables!) and I'll likely slip into 'Paralysis by Analysis'...

On the plus side, current occupancy for their hotels are rather low (perhaps due to ongoing AEIs) and in the longer term, there can be some upside potential (perhaps FY14).

At this point in time, I'm still monitoring this REIT. Yes, the Yield is rather attractive and may provide some margin of safety. For eg. with a Yield = 8%+, if I were to get vested, I'd be betting that it won't drop by more than 8% in share price for the year.

What's stopping me now is the weak market sentiment as I have to evaluate against other alternatives. I'm also waiting to observe the listing of the newly placed shares @ $0.885 on 10-Jun (Mon). Some may just cut-loss and cause a further selling down.

[evolance]

KopiKat,

thks for the reply
I am learning new things every day with valuable insights (how to go abt doing a better analysis) from seniors in investing like you in VB

[evolance]

What's stopping me now is the weak market sentiment as I have to evaluate against other alternatives. I'm also waiting to observe the listing of the newly placed shares @ $0.885 on 10-Jun (Mon). Some may just cut-loss and cause a further selling down.

Thought thru the weekend, 10 Jun may not b a gd time to guage.
Last Fri's shows mixed signals from US. Beta than expected employment, but not good enough, causing unemplyment rate to fall 0.1%.

Big Players may take this as a signal the Fed will not reduce QE and jack up the prices of all REITs artificially