Ascott Reit's S$250 million perpetual securities receive strong investor participation with orders exceeding S$1 billion
Singapore, 23 June 2015 – Ascott Residence Trust (Ascott Reit) has successfully raised S$250 million from the issuance of perpetual securities at a fixed distribution rate of 4.68% per annum. The perpetual securities received strong investor participation with orders exceeding four times of the issue size. Proceeds from the perpetual securities will be used to fund potential acquisitions in the future.
Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “The issuance of perpetual securities is part of Ascott Reit’s prudent capital management strategy to tap diversified funding sources and enhance our financial flexibility to seize growth opportunities. Perpetual securities is a good source of funding to finance our acquisitions while maintaining our gearing at about 40%. We are encouraged by the strong investor confidence in our growth strategies as we continue to strengthen Ascott Reit’s position as the largest hospitality trust in Singapore by asset value. To further optimise returns for Unitholders, we are actively pursuing acquisitions to enhance Ascott Reit’s portfolio as we seek to achieve our target asset size of S$6.0 billion by 2017.”
Mr Ronald Tay, ARTML’s Chief Executive Officer, said: “Ascott Reit’s S$250 million perpetual securities have attracted strong participation from institutional investors and private banking clientele. Our maiden issuance of S$150 million perpetual securities in October last year has been trading above par, demonstrating the high demand for our perpetual securities. We thank our investors for their continued support of Ascott Reit.”
The perpetual securities which will be accounted as equity will be unrated. In April this year, Moody’s Investors Service improved Ascott Reit’s rating from Baa3 corporate family rating to Baa3 issuer rating, recognising the trust's stable and healthy financial profile, supported by a track record of prudent financial management.
OCBC Bank is the sole lead manager, bookrunner and underwriter for the issuance of the perpetual securities