Parkway Life Reit achieves 0.51% pricing for 3.3 billion yen debt

THE manager of Parkway Life Reit has successfully termed out its maturing debts with the pricing of 3.3 billion yen (S$41.3 million) 0.51 per cent six-year senior unsecured fixed rate notes due 2027 under its S$500 million multicurrency debt issuance programme.

The notes issue is expected to complete on March 29, 2021.

The proceeds will be used to repurchase an earlier March 29, 2016 issuance of 3.3 billion yen, 0.58 per cent senior unsecured notes due 2022 at a price of 100 per cent of their principal amount without penalty.

The new notes are priced lower than the existing notes, resulting in further interest cost savings for the next six years.

CEO of the manager Yong Yean Chau said: "While many countries are trying to rein in the spread of Covid-19 and speed up the rate of vaccination, the current economic outlook remains uncertain and it is crucial for Parkway Life Reit to mitigate any potential refinancing risk by pre-emptively terming out maturing debts.

"The successful pricing of new notes for a further six years at an attractive rate, to repurchase the notes due 2022 at par and without penalty, validates the continual strong support of the growth strategy in Japan."

The proposed notes issue, denominated in yen, also serves as a natural hedge for the Reit's Japanese assets and mitigates foreign exchange risk.

DBS Bank has been appointed as the sole lead manager and sole bookrunner for the new issuance; it is also the buyback agent for the repurchase of the maturing debt.