Lendlease Global Commercial REIT (LREIT) has priced SGD200 million of perpetual securities with a coupon rate of 4.20% per annum, with the transaction upsized to meet an oversubscription for the issue.
The Series 001 securities were priced on 27 May 2021, and will be issued under the REIT’s SGD1 billion multicurrency debt issuance programme.
The securities will bear an initial rate of distribution of 4.20% per annum for the first five years.
The first reset of the distribution rate will be on 4 June 2026 with subsequent resets occurring every five years thereafter.
The issue was oversubscribed based on the initial target size of SGD150 million.
As such, this enabled LREIT to upsize the transaction to SGD200 million with price tightening to 4.20% from the initial guidance of 4.35%.
“We are very pleased to see the high level of institutional and retail investor confidence in LREIT’s stable financial profile and resilient portfolio as well as the strong market response to our inaugural perpetual securities”, said Kelvin Chow, CEO of the REIT’s manager.
Net proceeds from the issue will be used for the financing of potential acquisition and investment opportunities, as well as general working capital, capital expenditure requirements and refinancing of existing borrowings.
LREIT’s aggregate leverage ratio is expected to improve from 35.4% as at 31 March 2021 to 31.3% when the issue is completed.
DBS Bank and OCBC Limited have been appointed as the joint lead managers for the issue.
LREIT was last done on the Singapore Exchange (SGX) at SGD0.765, which implies a distribution yield of 6.12% according to data compiled on the Singapore REITs table.