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Manulife US Reit secures up to US$193m in loan facilities

MANULIFE US Real Estate Investment Trust’s trustee DBS Trustee has signed an agreement to secure up to US$193 million worth of loan facilities to refinance existing loans, partly finance a US property acquisition, and for general corporate and working capital purposes.

The lenders are Bank of China's Singapore branch, BNS Asia, DBS Bank, OCBC Bank and Standard Chartered Bank's Singapore branch, the Reit’s manager said on Friday before the market opened.

Out of the amount, a term loan facility of US$110 million will be used for refinancing an existing loan for a US office building located in 865 South Figueroa Street, Los Angeles, California. The facility is intended to be drawn down in July 2019 for the refinancing.

It also includes a term loan facility of US$33 million to be used to partly finance its acquisition of its Centerpointe property in the United States, an office building located at 4000 and 4050 Legato Road, Fairfax, Virginia; or, to refinance the loans utilised to part finance the property.

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Meanwhile, a revolving loan facility of US$50 million will be used for general corporate and working capital purposes for Manulife US Reit and its subsidiaries.

The facilities are secured, among others, by share charges over the Reit’s Singapore subsidiaries, the assignment of certain bank accounts, and/or the assignments of certain intercompany loans.

Should there be a breach of relevant conditions, around US$1.15 billion worth of loan facilities may be affected, said the Reit manager.

Such conditions include Reit manager Manulife US Real Estate Management ceasing to be a direct or indirect wholly-owned subsidiary of The Manufacturers Life Insurance Company, and/or DBS Trustee ceasing to be the sole trustee of Manlulife Reit under the trust deed dated in March 2015.

The loan agreement will also be in default if the Reit manager is removed as per terms of the trust deed and a replacement is not appointed with the same terms within 60 days.

Units of Manulife US Reit closed flat at US$0.87 on Thursday.