SINGAPORE (Jan 5): OCBC Investment Research is maintaining its “hold” call on OUE Hospitality Trust on valuation grounds with a higher fair value estimate of 83 cents from 82 cents previously.

This comes on expectations of a 6.2% FY18 yield against Thursday’s closing price of 88 cents per unit, after adjusting the research house’s model parameters on a lower average cost of debt post the grant of a term loan and revolving loan facilities.

To recap, OUE HT on Dec 13 entered into a facility agreement with four banks for the grant of a term loan and revolving loan facilities amounting to $980 million, which brings the trust’s average cost of debt down to about 2.4% compared to 2.8% in 3Q17.

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