Prime US Reit private placement raises US$80m; over twice subscribed at US$0.81

PRIME US Reit's manager on Friday announced that its private placement which raised US$80 million was more than two times subscribed.

A total of 98.8 million new units will be issued at 81 US cents per new unit, and their listing is expected to commence at 9am on July 5, 2021.

The issue price is fixed at the higher end of the 79.7 US cents and 82.2 US cents price range announced on Thursday.

It represents a 3.4 per cent discount to the adjusted volume-weighted average price of 83.85 US cents per unit on Wednesday, the preceding market day up to the time the placement agreement was signed on Thursday.

DBS and Credit Suisse were the joint lead managers and underwriters for the deal.

In its latest announcement, the real estate investment trust's (Reit) manager said its placement was well subscribed with strong demand from both existing unitholders and new investors with a good mix of long-only institutional investors, multi-strategy funds, family offices and private wealth clients.

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Institutional investors accounted for over half the demand and final allocations, accompanied by strong private wealth and family office interest, it added.

Proceeds of the placement will partially fund the Reit's proposed acquisitions of Sorrento Towers in San Diego, California and One Town Center in Boca Raton, Florida.

The manager's chief executive and chief investment officer, Barbara Cambon, said the acquisitions add visibility to the Reit's organic growth prospects and will enhance its returns to stakeholders.

"We were uncompromising in our selection of assets to enhance our portfolio exposure to secular trends in growth cities, key sectors and quality assets. This benefits unitholders in the form of added income resiliency and portfolio diversity," said Ms Cambon.

"The deal structure was strategic and deliberate, with a view to balancing distribution per unit accretion to our existing unitholders whilst maintaining a strong capital structure to position Prime US Reit favourably for future acquisition opportunities," she added.

Units of Prime US Reit closed one US cent or 1.2 per cent higher at 88 US cents on Wednesday before its manager called for a trading halt on Thursday morning. The Reit will resume trading today.