ESR-Reit trustee prices S$125m fixed-rate notes due 2026 at 2.6%

ESR-REIT J91U 'S trustee has launched and priced S$125 million of unsecured fixed-rate notes due 2026 at 2.6 per cent per annum, the real estate investment trust's (Reit) manager said in a bourse filing on Thursday.

The notes, which the Reit manager said has its lowest-ever bond coupon, will be issued under the Reit's S$750 million multicurrency debt issuance programme.

The manager expects the notes will be issued on Aug 4 and listed on the Singapore Exchange on Aug 5, with OCBC as the sole lead manager and bookrunner for the offer.

Proceeds will be used for acquisitions, investments, developments and/or asset enhancement works and general working capital and capital expenditure requirements, and also to refinance existing borrowings.

The offer was more than 2.2 times subscribed and "underpinned by strong demand from institutional investors", with 93 per cent of the offer placed to fund managers and insurance accounts based in Singapore, ESR-Reit's manager said.

Its pricing had been tightened from its initial guidance of 2.75 per cent.

ESR-Reit on Wednesday announced it also priced a preferential offering at S$0.40 per unit to raise gross proceeds of S$50 million, for debt repayment and to partially fund its asset enhancement initiatives.

Chief executive and executive director of the manager Adrian Chui said: "With this financial flexibility, we will continue to modernise our portfolio with value-accretive acquisitions, asset enhancements and divestments to remain relevant and future-ready, reduce our portfolio risks and deliver long-term sustainable growth for our unitholders."

Units of ESR-Reit closed flat at 44.5 Singapore cents on Wednesday.