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Starhill Global Reit MTN prices S$70 million fixed rate notes due 2026
STARHILL Global Reit MTN (SGREIT MTN) has priced its S$70 million unsecured fixed rate notes, which have a tenor of 10 years and will mature in October 2026.
In an announcement on Friday, YTL Starhill Global Reit Management, the manager of SGREIT, said that the notes are expected to be issued on Oct 3 and are assigned a rating of "BBB+" by Standard & Poor's Rating Services.
The net proceeds from the notes will be used to refinance SGREIT's existing borrowings, meet capital expenditure requirements, and for its working capital purposes.
They will carry a fixed interest rate of 3.14 per cent per annum payable semi-annually in arrear. Following the issuance of the notes, SGREIT's average debt maturity will increase from 3.1 years to about 3.6 years, and gearing is expected to increase from 35 per cent to about 35.3 per cent.
YTL Starhill Global Reit Management said that this is assuming that about S$55 million of the net proceeds are utilised to repay external borrowings.
Ho Sing, chief executive officer of YTL Starhill Global, said that the new 10-year issue has been priced at an "attractive coupon rate".
He added: "As part of our proactive capital management strategy, we have no refinancing requirements until May 2018, and the issue will further extend our debt maturity profile and diversify our sources of funding."