Tag Archives: Singapore REITS

K-REIT to raise S$620m through one-for-one rights issue

Posted on 1 Oct 2009 | Comments Off on K-REIT to raise S$620m through one-for-one rights issue

K-REIT Asia is planning to raise S$620 million through a one-for-one rights issue.

It is offering about 667 million rights units at 93 cents each, representing a 21.2 per cent discount to K-REIT Asia’s closing price of S$1.18 per unit on September 30.

K-REIT Asia said it intends to use about 80 per cent of the gross proceeds to repay borrowings provided by Kephinance Investment. This includes a bridging loan to be drawn down for the acquisition of six strata floors of Prudential Tower.

The remaining proceeds are to be used to fund potential acquisitions and asset enhancement initiatives, as well as general corporate and working capital purposes.

When the rights issue is completed, K-REIT Asia said its aggregate leverage is expected to decrease from 33 per cent to 9.1 per cent.

Keppel Corporation and Keppel Land, which together own about 75.8 per cent of K-REIT Asia’s units, have undertaken to subscribe for their entitlement of rights units.

The remaining 24.2 per cent of rights units will be underwritten by BNP Paribas, Singapore Branch, which is acting as lead manager, underwriter and financial adviser for the rights issue.

An extraordinary general meeting is expected to be convened to approve the rights issue.

Source : Channel NewsAsia – 30 Sep 2009

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S-Reit outlook still negative: Fitch

Posted on 30 Sep 2009 | Comments Off on S-Reit outlook still negative: Fitch

This despite better share prices and refinanced debt

SINGAPORE-listed real estate investment trusts (S-Reits) have mostly refinanced their maturing debt obligations this year and have benefited from a recent share price recovery, noted Fitch Ratings in a new special report. But questions still remain regarding their financial flexibility and refinancing ability, the ratings agency said.

Fitch is also maintaining its overall negative outlook for the sector, owing to negative asset performance expectations. However, the credit performance of the sector is expected to be driven by the industry sub-sector, hence individual S-Reits may have different outlooks.

The report noted that 12 out of 20 S-Reits, for which information was publicly available, reported a decline in the value of total assets as at end June 2009, from a year ago, largely on the back of falling asset prices and write-downs. Office S-Reits, in particular, reported a 4.2 per cent drop in total assets in the year ended June 2009, compared with an increase of about 54 per cent in the previous year, while retail S-Reits added 1.5 per cent to their total assets in the same period.

S-Reits, like property-related companies globally, have been buffeted by the global financial crisis, Fitch noted. Continue reading →

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