United Hampshire US Reit in refinancing negotiations for debt maturing in 2023

UNITED Hampshire US Reit : ODBU 0% (UHReit) has begun negotiations on refinancing options for its short-term liabilities maturing in March 2023, and is confident of a successful outcome, said the real estate investment trust’s (Reit) manager in a bourse filing on Monday (Aug 22).

The announcement was in response to queries raised by the Singapore Exchange Securities Trading (SGX-ST) about UHReit’s “significant liabilities of S$309.2 million and cash and bank balance of only S$12.6 million”.

In particular, SGX-ST asked if the group’s current assets are adequate to meet its short-term liabilities of S$103.3 million and how it intends to fulfil its significant payment obligations in the next 12 months.

The Reit manager said the group’s current liabilities of S$103.3 million as at June 30, 2022 are mainly due to a reclassification of a term loan of S$91.5 million and revolving credit facility.

It says it has “a broad range of banking relationships with local and international banks” and has begun negotiations with both its existing as well as potential new lenders on refinancing options for its loan facilities well in advance of their maturity.

“Accordingly, the manager is confident that the outcome of the negotiations to refinance its loan facilities will be successful and will be completed prior to the maturity date,” said the announcement.

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The Reit manager added that as at Jun 30, UHReit has a low aggregate leverage of 38 per cent and a healthy interest coverage ratio of 6.0 times in accordance with requirements under its loan facilities and 4.6 times in accordance with the Property Funds Appendix of the Collective Investment Schemes Code.

Apart from the ongoing refinancing exercise, UHReit is able to fulfil its payment obligations in the next 12 months as its business fundamentals are resilient and performing well, and it has sufficient cash and expects adequate cashflow from its operations to meet working capital needs.

Units of UHReit closed flat at US$0.60 on Monday, before the announcement.