Ascott REIT prices debut S$150 million perpetual securities
Singapore, 17 October 2014 – Ascott Residence Trust (Ascott Reit) has priced its debut S$150 million perpetual securities with a fixed distribution rate of 5% per annum.
Proceeds from the issuance of the perpetual securities will be used to fund potential acquisitions and for general corporate funding purposes.
Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “This issuance of perpetual securities is part of Ascott Reit’s capital management strategy to tap diversified funding sources. It is an alternative form of equity fund raising for Ascott Reit and will strengthen our balance sheet. Moreover, it will enhance our financial flexibility to tap future growth opportunities to optimise returns for Unitholders. The strong demand from investors shows their confidence in Ascott Reit’s growth strategies.”
Mr Ronald Tay, ARTML’s Chief Executive Officer, said: “This is a milestone transaction for Ascott Reit. We would like to thank the investors for their continued support. Ascott Reit will continue to seek acquisition opportunities in key gateway cities in Asia and Europe, and we will also continue to invest in refurbishing our properties to drive organic growth.”
Ascott Reit has been assigned a Baa3 corporate family investment grade rating by Moody's Investors Service Limited. The securities will be unrated. Given that the securities will be accounted as equity, Ascott Reit’s aggregate leverage1 is expected to decrease following the issuance of the securities.
DBS Bank Ltd and J.P. Morgan (S.E.A.) Limited are the joint lead managers and joint bookrunners for the issuance of the perpetual securities.