Ascendas Reit to redeem S$300m 4.75% perps on first call date

Singapore

THE manager of Ascendas Reit on Thursday said the real estate investment trust (Reit) will redeem at par all the outstanding securities of its S$300 million, 4.75 per cent perpetual securities.

It will do so on Oct 14, the first call date.

Payment will be made to the Central Depository (CDP) on the same day, to those who hold the securities as at 5pm on Oct 7 according to the CDP records.

Following that, the securities will be cancelled and delisted from the Singapore bourse.

They were issued back in 2015, when Ascendas Reit's manager said it intended to use the net proceeds to partially fund the acquisition of a portfolio of logistics properties in Australia.

While Ascendas Reit's redemption is in line with conventional market expectation of issuers redeeming such instruments at first call, it goes against the precedent that some market watchers said Ascott Residence Trust (ART) had set some months ago.

In May, ART said it would not be redeeming its S$250 million, 4.68 per cent perp on its first call date the following month, in the first such non-call move for Reit perps.

Without the call, the coupon or distribution rate was reset on June 30 at the swap-offer rate plus the fixed spread.

Some market watchers had said then this could pave the way for other issuers to do the same and skip the first calls.

Other Reit perps with upcoming reset dates include Keppel Reit's 4.98 per cent perp with a call date on Nov 2, 2020 and Frasers' Hospitality Reit's 4.45 per cent perp with a call date on May 12, 2021.