Suntec Reit to issue S$200m 2.95% notes

Singapore

SUNTEC Real Estate Investment Trust (Suntec Reit) has launched S$200 million worth of new seven-year notes.

The unsubordinated and unsecured notes are expected to mature on Feb 5, 2027, Suntec Reit said in a filing on Wednesday night. They will carry a coupon fixed at 2.95 per cent per annum. The issuer is Suntec Reit MTN, a wholly-owned subsidiary of Suntec Reit's trustee, HSBC Institutional Trust Services (Singapore).

Net proceeds from the issue, after deducting issue expenses, will be used by Suntec Reit and its subsidiaries to finance or refinance acquisitions and/or investments. The proceeds will also go into funding any asset enhancement works, refinancing existing borrowings and for general corporate purposes.

The notes are expected to be issued at par or 100 per cent of face value on Feb 5, subject to the satisfaction of customary closing conditions, in denominations of S$250,000. They will be listed on the Singapore Exchange.

The payment of all amounts due in respect of the notes are unconditionally and irrevocably guaranteed by Suntec Reit's trustee.

They will be issued under the US$1.5 billion euro medium-term note programme, Suntec Reit's manager said in the filing.

DBS Bank and OCBC are the appointed joint lead managers and bookrunners for the deal.

Pursuant to listing rules, the notes include a condition that stipulated that it would be an event of default if ARA Trust Management (Suntec) ceases to be the manager of Suntec Reit and if the substitute manager is not appointed in accordance with the terms of the deed of trust constituting Suntec Reit. In the event of a breach of this condition, the total amount of facilities - including the new notes - is about S$3.6 billion as at Jan 29, the manager said.

The issuer Suntec Reit MTN is rated Baa3 by Moody's Investors Service. The notes are unrated.

Units of Suntec Reit dropped one cent, or 0.5 per cent, to S$1.84 on Thursday.