Ascendas Reit private placement 2.6 times subscribed at S$2.944

A17U 's private placement of 142.7 million new units to raise S$420 million was around 2.6 times covered, the manager said on Wednesday.

The Reit priced the placement at S$2.944 per new unit, the lower end of the indicative range of S$2.944 to S$3.019.

The issue price represents a discount of 5.2 per cent to the volume-weighted average price of S$3.1062 per unit for trades done on Tuesday, the day the placement agreement was signed.

About S$240.1 million, which is more than half the gross proceeds, will be used to partially fund the Reit's S$534.4 million acquisition of the balance 75 per cent stake in one-north business park Galaxis.

The rest will be used for debt repayment and also to pay the fees and expenses connected to the private placement.

The manager said the private placement drew strong demand from new and existing institutional, accredited and other investors. DBS Treasury Investments Unit has been allocated around 16.5 million new units under the placement.

Around S$173.4 million, or 41.3 per cent of the proceeds will be used for debt-repayment purposes, including debt previously drawn down for investments, developments and/or asset enhancement initiatives. This will allow Ascendas Reit to reduce its aggregate leverage to 37 per cent from 38 per cent, the manager said.

Some S$6.5 million will be used to pay the fees and expenses connected to the private placement, and the remaining will be used for general corporate or working-capital purposes.

The manager expects the trading of the new units to commence at 9am on May 14.

Citigroup Global Markets Singapore and DBS are the joint lead managers and underwriters for the transaction.

The counter closed S$0.12 or 3.9 per cent lower at S$3 on Wednesday.