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ESR-Logos Reit prices S$100 million perpetual capital securities at 6%

by Yurie Miyazawa
in Leadership
ESR-Logos Reit prices S0 million perpetual capital securities at 6%
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ESR-Logos Real Estate Investment Trust (Reit) priced S$100 million perpetual capital securities at 6 per cent, said its manager on Tuesday (Aug 13).

This is in addition to the S$74.8 million perps that were priced as part of an exchange consideration.

The consideration, which the trust announced earlier this month, comprised S$250,000 in principal amount of new perps, with accrued distribution. It also includes an amount in cash at 1 per cent of existing securities.

Both the S$74.8 million and S$100 million perps will be issued as part of the trust’s S$750 million multicurrency debt issuance programme.

OCBC has been appointed as the sole lead manager for the issue.

Holders will receive distributions in arrears and may redeem the perps on the first reset date on Aug 20, 2029, or any distribution payment date falling every five years after the first reset date.

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If the perps are not redeemed on the first reset date, the distribution rate will be reset on that date and every five years thereafter. This will be at a per-annum fixed rate equal to the aggregate of the prevailing five-year Singapore Overnight Rate Average Overnight Indexed Swap – and the initial spread of 3.548 per cent.

Part of the net proceeds from the latest tranche will be used to finance the acquisition of two facilities in Japan and Singapore.

In July, the manager announced its plan to purchase ESR Yatomi Kisosaki Distribution Centre in Nagoya, and 20 Tuas South Avenue 14. They will be acquired for about 38.7 billion yen (S$340.1 million) and S$444.6 million, respectively.

The manager had planned to fund the acquisition by debt financing, the issuance of new units to existing unitholders to raise up to S$194 million, and consideration units of up to S$60.3 million.

However, it highlighted that with the S$100 million perps raised, the preferential offering size would be reduced to S$94 million.

Assuming that the acquisitions were completed on Jan 1, 2023, and funded by the net proceeds from its equity fundraising and perps, the Reit’s FY2023 pro-forma distribution per unit will rise 3 per cent to S$0.02641 from S$0.02564.

Meanwhile, its pro-forma aggregate leverage will rise to 41 per cent, from 35.7 per cent as at Dec 31, 2023, assuming the acquisitions had been completed in end-December.

Units of ESR-Logos Reit were trading up 2 per cent or S$0.005 at S$0.26 as at 9.12 am on Tuesday.

Tags: CapitalESRLogosMillionperpetualpricesReitS100Securities
Yurie Miyazawa

Yurie Miyazawa

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