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Keppel Pacific Oak US Reit obtains US$115m five-year term loan facility

KEPPEL Pacific Oak US Reit (KORE) has obtained a US$115 million, five-year term loan facility to pay off its borrowings that are due in November 2021, the real estate investment trust's (Reit) manager said in an exchange filing on Thursday.

The loan facility was obtained through KORE's trustee Perpetual Asia Limited, in accordance with a facility agreement, its manager said.

The loan facility will be used for the early refinancing of KORE's borrowings, which were obtained during its initial public offering in November 2017, its manager said. KORE has also restructured the interest rate swap in relation to these borrowings.

Had the refinancing of the borrowings and the restructuring of the interest rate swap occurred on Jan 1, 2020, KORE’s all-in average cost of debt for the first quarter of 2020 would have improved from 3.53 per cent to 3.38 per cent. In addition, had the refinancing of the borrowings occurred on March 31, 2020, its average term to maturity as at March 31, 2020 would have increased from 2.9 years to 3.7 years, its manager said.

One condition for the loan facility is that if Keppel Corporation and its subsidiaries and either Pacific Oak Capital Advisors and its subsidiaries or KBS Pacific Advisors cease to own all the issued share capital of KORE's manager, KORE would need to pay all outstanding loans within 10 business days.

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