SPH REIT unveils billion-dollar multi-currency debt programme

The issuer said it plans to use the net proceeds for general working capital, capital expenditure and corporate requirements such as acquisitions and investments, and/or for the refinancing of existing borrowings.

Mall landlord SPH REIT on Wednesday (August 21, 2019) said it has established a S$1 billion multi-currency debt issuance programme to fund for general working capital and acquisition purposes. The manager of the real estate investment trust (REIT) added that parts of the proceeds may be used for a potential acquisition.

Under the programme, the REIT will issue notes and perpetual securities. The manager of the REIT has sent out detailed terms and conditions in an information memorandum today (August 21, 2019).

The issuer said it plans to use the net proceeds for general working capital, capital expenditure and corporate requirements such as acquisitions and investments, and/or for the refinancing of existing borrowings.

The REIT manager said that it is currently conducting due diligence on a potential acquisition and parts of the proceeds may be used to fund the purchase. Although it added that the details on the discussions are still preliminary.

Each series or tranche of notes may be issued in various amounts and tenors, and may bear different interest rates – fixed, floating, variable, hybrid, or none – depending on the issuer.

Perpetual securities are bonds with no maturity date, but the issuer may choose to redeem the securities after a specified period of time. They tend to offer higher yields than bonds to compensate investors for the higher risks involved due to the lack of a fixed maturity date.

HSBC, Singapore branch, and OCBC are the arrangers and dealers of the programme.

The owner of retail malls in Singapore including the Paragon Mall at Orchard Road and The Clementi Mall posted a distribution per unit of 1.39 Singapore cents for the third quarter, 1.5% higher and an increase in net property income from a year ago at S$46.3 million.

SPH REIT’s units were unchanged at S$1.07 at 9.55am, Singapore time.

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