Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Equity Capital Markets

CDL Hospitality Trusts / Equity Capital Markets

City Development Hospitality Trust, or CDLHT, continues its hot pursuit of international hotels by acquiring a 94.9% stake in Pullman Hotel in Munich, Germany, for EUR 98.9 million, or SGD 153.8 million. This is on the back of the Lowry Hotel acquisition in Manchester, United Kingdom, last month. The acquisition will be fully funded by debt, but the trust is undertaking a fully underwritten 1-for-5 renounceable rights issue of SGD 255.4 million to repay existing, more expensive debt. The rights issue includes rights issue expenses of SGD 4.4 million and working capital and capital expenditure of SGD 1 million. Gearing following the two acquisitions would have increased to 42.6% of total assets from 36.8% as of the first quarter result, close to the regulatory cap of 45%. The rights issue will lower gearing to 33.6%, providing SGD 577.2 million of debt headroom up to the regulatory cap for further acquisitions.In line with the Lowry Hotel acquisition, we view this acquisition positively, as the trust is executing on its strategy of diversifying away from its core market of Singapore. Singapore's contribution to net property income declines to 55% from 62%. We still believe hotel room rates and occupancy levels in Singapore will be pressured by additional new supply and generally weak corporate spending. We retain our no-moat rating on the trust, as we do not see hotels in general benefiting from competitive advantage.The rights issue at SGD 1.28 per unit represents a 23.8% discount to the last close price of SGD 1.68. The units are trading at SGD 1.63, or above its theoretical ex-issue price of SGD 1.613. We see the rights issue as attractive and advise existing unitholders to subscribe. The trust is trading largely in line with our unchanged fair value estimate of SGD 1.60. The stapled securities trade cum-rights until June 30, with ex-rights occurring on July 3. There is no change to the distribution policy of 90% of taxable income and tax-exempt income.The rights issue is fully underwritten by DBS Bank, and CDLHT’s sponsor Millennium and Copthorne, which holds a 37% stake in the trust, will also fully subscribe to their proportion in the issuance.Analyst: Michael Wu, CAIA

City Development Hospitality Trust, or CDLHT, continues its hot pursuit of international hotels by acquiring a 94.9% stake in Pullman Hotel in Munich, Germany, for EUR 98.9 million, or SGD 153.8 million. This is on the back of the Lowry Hotel acquisition in Manchester, United Kingdom, last month. The acquisition will be fully funded by debt, but the trust is undertaking a fully underwritten 1-for-5 renounceable rights issue of SGD 255.4 million to repay existing, more expensive debt. The rights issue includes rights issue expenses of SGD 4.4 million and working capital and capital expenditure of SGD 1 million. Gearing following the two acquisitions would have increased to 42.6% of total assets from 36.8% as of the first quarter result, close to the regulatory cap of 45%. The rights issue will lower gearing to 33.6%, providing SGD 577.2 million of debt headroom up to the regulatory cap for further acquisitions.In line with the Lowry Hotel acquisition, we view this acquisition positively, as the trust is executing on its strategy of diversifying away from its core market of Singapore. Singapore's contribution to net property income declines to 55% from 62%. We still believe hotel room rates and occupancy levels in Singapore will be pressured by additional new supply and generally weak corporate spending. We retain our no-moat rating on the trust, as we do not see hotels in general benefiting from competitive advantage.The rights issue at SGD 1.28 per unit represents a 23.8% discount to the last close price of SGD 1.68. The units are trading at SGD 1.63, or above its theoretical ex-issue price of SGD 1.613. We see the rights issue as attractive and advise existing unitholders to subscribe. The trust is trading largely in line with our unchanged fair value estimate of SGD 1.60. The stapled securities trade cum-rights until June 30, with ex-rights occurring on July 3. There is no change to the distribution policy of 90% of taxable income and tax-exempt income.The rights issue is fully underwritten by DBS Bank, and CDLHT’s sponsor Millennium and Copthorne, which holds a 37% stake in the trust, will also fully subscribe to their proportion in the issuance.Analyst: Michael Wu, CAIA

CDLHT Acquisition Spree Continues; Also Announces SGD 255 Million Rights Issue