Reit perp holders risk drops in coupon rate if issuers reset

Singapore

AS analysts expect more Reit issuers of perpetual bonds to follow in Ascott Residence Trust's (ART) footsteps, DBS Group Research on Monday flagged that perpetual holders could face a risk of a 1 to 1.8 percentage point drop in coupon rates if the issuers choose to skip their first calls.

In the second half of this year, Ascendas Reit's 4.75 per cent S$300 million perpetual bonds and Keppel Reit's 4.98 per cent S$150 million perpetual bonds will approach their first call date on Oct14 and Nov 2, respectively.