Mapletree will not redeem S$700m in perpetual securities on first call date

MAPLETREE Treasury Services said on Monday (Nov 7) that it will not be redeeming S$700 million of 3.95 per cent subordinated perpetual securities on their first call date on Nov 12, 2022.

The perpetual securities were issued in May 2017 and have no fixed final redemption date. Mapletree Treasury, which is a subsidiary of Mapletree Investments, has the option to redeem the securities on the first call date on Nov 12, 2022, or on any distribution payment date thereafter.

“In view of the current macroeconomic conditions and interest rate environment, Mapletree wishes to announce that it will not be exercising the issuer call on the first call date,” Mapletree said in an exchange filing.

Global interest rates have been rising in recent months, as central banks worldwide take action to combat persistent inflation. In Singapore, the risk-free Treasury bill with a six-month tenor had a cut-off yield of 4.19 per cent per annum in the Oct 27 auction, a record high in decades, The Business Times reported last month.

Mapletree noted that if the securities are not redeemed, the distribution rate will be reset on the first reset date to the relevant reset distribution rate, which will include an initial spread and step-up margin.

However, the first reset date comes only on Nov 12, 2027. There will not be any reset of the distribution rate on Nov 12, 2022, and the distribution rate of the securities will remain unchanged at 3.95 per cent per annum, Mapletree added.