First Reit completes early financing for 50.6% of debt after trustee enters facility agreement

FIRST Real Estate Investment Trust (Reit) : AW9U 0% trustee Perpetual (Asia) has entered into a facility agreement with OCBC and CIMB Singapore as original lenders in terms of a term loan facility of S$225 million and a revolving credit facility of S$75 million, the Reit manager announced in a press statement on Friday (Nov 25).

Proceeds from the facilities will go towards refinancing an existing S$260 million term and revolving credit facilities due in March 2023, with an outstanding debt of S$225.7 million. The existing loan represents 50.6 per cent of First Reit’s total debt as at Sep 30.

With the entry into the new facilities, the Reit’s next refinancing requirement is when 10.7 billion yen (S$105.6 million) of TMK bonds of debt is due in May 2025.

“Proceeds from the new facilities will also be applied towards the financing or refinancing of eligible social assets in accordance with First Reit’s Social Finance Framework,” said the Reit manager.

OCBC and CIMB Singapore said the proceeds of the social loan will be directed towards the Reit’s healthcare assets that will create positive social impact through improving the quality of and access to healthcare services in Indonesia.

The Reit manager added that post-refinancing, on a pro forma basis as at Sep 30, First Reit’s gearing ratio will remain stable at around 35.6 per cent, while weighted average debt to maturity will improve to 3.64 years from 1.99 years. The proportion of debt tied to delivering social impact will also rise to 76.7 per cent, from 26.1 per cent as at Sep 30.

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More than one-quarter of First Reit’s assets under management are in developed markets, factoring recent acquisitions in Japan, noted Victor Tan, executive director and chief executive officer of the manager.

“Given our healthy financial position and with no near-term loan refinancing requirements on the horizon, First Reit is well-placed to further grow our developed markets portfolio to more than 50 per cent of assets under management by 2027,” he said.

Elaine Lam, head of global corporate banking at OCBC, said the loan “is in line with our goal to create lasting value for the communities we serve, and to help drive sustainable development across our core markets”.

Victor Lee, CEO of CIMB Bank Singapore, added: “Putting our customers and communities at the core of what we do has always been our ethos and aligns with our sustainability commitment to maximise positive impact through sustainable finance.”

Units of First Reit closed at S$0.245 on Friday, up 2.1 per cent or S$0.005, before the announcement.