Wednesday, March 17, 2010

A-Reit boosts capital base to refinance, fund acquisitions

INDUSTRIAL landlord Ascendas Real Estate Investment Trust (A-Reit) has enhanced its capital structure through a series of capital management initiatives.

As a result, the trust has effectively extended its weighted average debt maturity to 4.5 years – from 2.4 years – and secured funds for acquisitions, it said yesterday.

The trust has extended a $300 million loan that was due this month by seven years to March 2017. It also decided to pay off 165 million euros (S$317 million) of debt due in May 2012 now ‘in view of the significant amount of refinancing expected in the Singapore real estate sector in 2012′.

After the euro debt has been paid off, 23 properties valued at $1.2 billion will no longer be mortgaged. A-Reit has 91 properties in Singapore worth about $4.8 billion in all.

The trust also said a $300 million exchangeable collateralised securities issue – which it announced on Monday – has been successful. The issue attracted strong participation from over 70 institutional investors and was 4.5 times subscribed.

The securities, due in 2017, come with a put option in 2015. They were priced at a coupon and yield to maturity of 1.6 per cent and an exchange price of $2.45 – which is a 25 per cent premium to A-Reit’s closing price on March 15.

A-Reit will use the proceeds from the issue to refinance existing borrowings and finance the acquisition and development of properties.

With all of the initiatives, the trust has increased its weighted average debt maturity and managed to gain funds for future acquisitions.

‘Other than the $150 million medium-term notes and the $138 million committed revolving credit facility due in 2011, A-Reit does not have any major debt refinancing till 2014 and is therefore well positioned to capitalise on growth opportunities moving forward,’ the trust said in a filing to the Singapore Exchange.

A-Reit lost two cents to close at $1.94 yesterday.

Source: Business Times, 17 Mar 2010

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