DBS Research notes 'compelling case' for privatisation of Frasers Hospitality Trust

Singapore

THE decision by Frasers Hospitality Trust (FHT) to redeem its S$100 million, 4.45 per cent perpetual securities may lead to an uptick in distributions if the managers repay the perps with debt, DBS Group Research said.

This is assuming the stapled group is able to obtain new debt priced close to its average weighted cost of debt of 2.2 per cent, compared to the potential estimated reset coupon of 3 to 3.2 per cent.