You are here

ARA US Hospitality Trust prices IPO at US$0.88 per stapled security to raise US$498m

ARA US Hospitality Trust has priced its initial public offering (IPO) at US$0.88 per stapled security, according to registration documents on May 2.

The IPO comprises nearly 379.8 million stapled securities subject to the over-allotment option, comprising an international placement of over 328.6 million stapled securities to investors outside the US, and an offering of over 51.1 million stapled securities to the public in Singapore. 

Separately, six cornerstone investors have taken up 132.4 million shares.

ARA US Hospitality Trust expects to raise gross proceeds of US$498 million from the offering, including nearly US$163.8 million from the issuance of cornerstone stapled securities and sponsor subscription stapled securities. In addition, ARA H-Reit is expected to draw down on some US$251.8 million of debt facilities by the listing date. 

Over US$715.2 million of that combined US$749.8 million will go towards redemption proceeds and repayment of the existing loan facilities, US$28 million will go to transaction costs and US$6.5 million will go to working capital.

Your feedback is important to us

Tell us what you think. Email us at

The expected distribution yield is 8.0 per cent from May 1, 2019 to Dec 31, 2019, and 8.2 per cent for the projection year 2020.

The public offer will open at 9pm on May 2, and close at noon on May 7. 

Trading is expected to begin at 2pm on Thursday, May 9.

If successful, this will be the Singapore bourse’s first hospitality trust focused purely on the US market. The portfolio has a total appraised value of US$719.5 million, comprising 38 upscale select-service hotels spanning 4,950 rooms in all. 

It will comprise US dollar-denominated stapled securities of ARA US Hospitality Property Trust (ARA H-Reit), which will hold the hotel properties; and ARA US Hospitality Management Trust (ARA H-BT), which will run the hotels.

It will also be the first new counter on the mainboard since last July’s listing of foodcourt operator Koufu Group.

The issue manager is DBS Bank. DBS Bank, OCBC Bank, United Overseas Bank and Credit Suisse (Singapore) are joint bookrunners and underwriters.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to