ESR-Reit prices S$125 million securities at 5.75%
[SINGAPORE] ESR-Reit has priced S$125 million in subordinated perpetual securities at 5.75 per cent under its S$750 million multicurrency debt issuance programme.
The net proceeds arising from the issue of its securities will be used to refinance or repay existing borrowings or to finance or refinance ESR-Reit’s acquisitions and investments, or for asset enhancement works, working capital and capital expenditure required, the Reit’s manager said on Thursday (Mar 13).
DBS and OCBC will be joint lead managers for the issue.
Holders will receive distributions in arrears and may redeem the perpetual securities on the first reset date of Mar 20, 2030, or any distribution payment date falling after the first reset date.
The distribution rate will be reset on the first reset date and every five years thereafter.
This will be at a rate equal to the Singapore Overnight Rate Average Overnight Indexed Swap plus the initial spread of 3.512 per cent. The distribution will be paid twice a year.
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The perpetual securities are expected to be issued on Mar 20.
ESR-Reit also announced it will be redeeming all of the outstanding Series 006 perpetual securities issued previously. The securities amount to S$75.25 million at a rate of 6.632 per cent.
“The net proceeds arising from the issue of the Series 011 perpetual securities will be used for the redemption of the more expensive Series 006 perpetual securities,” the Reit manager said.
This will allow ESR-Reit to achieve cost savings and optimise its capital structure, aligning with its strategy to adapt to shifts in the interest rate environment.
Units of ESR-Reit traded flat at S$0.245 as at 2 pm on Friday.
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