Keppel Reit to issue S$150m 3.15% fixed-rate perps

Singapore

KEPPEL Reit's trustee has priced S$150 million of fixed-rate subordinated perpetual securities at 3.15 per cent, the real estate investment trust (Reit) manager announced late on Monday night.

Net proceeds from this issue after deducting expenses will be used to refinance the trustee's existing S$150 million, 4.98 per cent subordinated perps.

The new perps are expected to be issued at par on Sept 11, and listed on the Singapore bourse on or around Sept 14, the Reit manager said.

The issuer may opt to redeem the perps at par in whole, but not in part, on Sept 11, 2025 or on any distribution date thereafter. Being perpetual, these securities have no fixed final redemption date.

A Keppel Reit spokesperson told The Business Times on Tuesday that the Reit received over S$350 million of orders across 32 accounts for the issuance. Most orders came from Singapore, with fund managers, insurers and banks accounting for 72 per cent of the orders, while private banks accounted for the remaining 28 per cent, the spokesperson added.

Keppel Reit will issue the new perps under its S$1 billion multicurrency debt issuance programme.

OCBC has been appointed as the sole lead manager and bookrunner of the offering.

In Q2 2020, Keppel Reit declared a distribution per unit of 1.40 Singapore cents, up slightly from 1.39 Singapore cents in the preceding year. Distributable income rose 0.4 per cent to S$47.5 million, including capital-gains distribution of S$5 million for the second quarter ended June 30. This was despite net property income declining by 7.2 per cent to S$28.8 million from a year earlier.

The Reit managed to lower its borrowing costs during the quarter. Its all-in interest rate was 2.48 per cent per annum, versus 2.86 per cent in the year-ago period.

Keppel Reit units closed flat at S$1.08 on Tuesday.