The manager of OUE REIT TS0U says the REIT’s wholly-owned subsidiary, OUE REIT Treasury, has issued its maiden seven-year green notes of $180 million at a 3.90% fixed rate due 2031.
The notes were issued under the REIT’s $2 billion multicurrency debt issuance programme and are rated “BBB-” by S&P Global Ratings, according to a prior announcement on Sept 19.
Oversea-Chinese Banking Corporation Limited (OCBC) is the sole global coordinator, while DBS Bank Ltd., and OCBC are the joint lead managers and bookrunner of the offering of the notes.
The manager says that under an initial price guidance of 4.15%, the offer has secured a “peak” orderbook of $320 million, representing an oversubscription of 3.2 times based on the REIT’s initial target size of $100 million.
The final offer has since been upsized to $180 million with pricing tightened to 3.90%.
As a result, the issuance attracted a final orderbook of $300 million, equating to an oversubscription of 1.7 times of the final upsized offer.
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The manager adds that approximately 70% of the final allocation is set to go towards institutional investors.
Following the issuance of the notes, the manager says that 6.8% of the REIT’s total debt is due in 2025.
On a pro forma basis, the REIT’s weighted average debt maturity is expected to lengthen to 3.2 years from 2.7 years as of June 30, while its weighted average cost of debt is expected to be reduced from 4.7% per annum to 4.6% per annum during the same period.
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Han Khim Siew, CEO of the manager, says: “We are deeply encouraged by the robust support from institutional investors. Their strong participation, coupled with substantial oversubscription, speaks volumes about investor confidence in our healthy capital structure, stable asset performance, and positive business outlook.”
He adds: “Looking ahead, we will continue to align our financing requirements with sustainable initiatives and remain focused on creating value for our stakeholders through prudent capital management.”
Units in OUE REIT closed 1 cent higher, or up 3.13%, at 33 cents on Sept 26.
