Starhill Global REIT's Ngee Ann City property. (Photo: REITsWeek)Starhill Global REIT's Ngee Ann City property. (Photo: REITsWeek)

Starhill Global REIT announced on 23 September that its SGD70 million (USD51.2 million) worth of unsecured fixed rate notes have been priced.

The notes were priced via Starhill Global REIT MTN Private Limited, a wholly owned subsidiary of HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Starhill Global REIT.

The notes, which are expected to be issued on 3 October, feature a tenor of ten years, will carry a fixed interest rate of 3.14% per annum, and mature in October 2016.

According to Starhill Global REIT, the notes are expected to be assigned a rating of “BBB+” by Standard & Poor’s Rating Services.

Singapore’s DBS Bank Limited has been appointed as dealer in relation to the issue, and offering of the notes.

Net proceeds from the issue will be used to refinance Starhill Global REIT’s existing borrowings, meet capital expenditure requirements, and working capital purposes, said the Singapore-listed office and retail REIT.

“As part of our proactive capital management strategy, we have no refinancing requirements until May 2018, and the issue will further extend our debt maturity profile and diversify our sources of funding”, said Ho Sing, CEO of the REIT’s manager, in a statement on the notes.

Following the issue, Starhill Global REIT’s average debt maturity will increase from 3.1 years to approximately 3.6 years, while gearing is expected to increase from 35% to approximately 35.3%, assuming approximately SGD55 million of the net proceeds are utilised to repay external borrowings.

Units of Starhill Global REIT finished the trading day about 0.6% lower from its previous close on the Singapore Exchange to end at SGD0.81.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.