Ascendas REIT - Rasing funds through private placement

Tuesday, August 25, 2009

Embark on equity fund raising. Ascendas REIT (A-REIT) has launched a private placement of 185m new units at between S$1.63 to S$1.70 per unit, or 3.8% to 7.8% discount to volume-weighted average price on 7 Aug 09. The equity fund raising is expected to raise gross proceeds of S$301.6m, which will be used in the following manner:

S$175.4m will be used to fund the development of the hi-tech built-to-suit facility for SingTel

S$120.6m will be used to fund potential acquisition of income-producing properties and built-to-suit development opportunities in the pipeline the balance to be used for general corporate and working capital purposes

The book building process starts today and is expected to be completed by 12 Aug 09. Gearing is expected to be reduced from 35.7% as at 9 Aug 09 to 29.3% after the completion of the private placement. There will be an advanced distribution based on distributable income from 1 Jul 09 to the day before new units are issued.

Improved financial flexibility. A-REIT will redeem Commercial Mortgage Backed Securities (CMBS) of €144.0m (about S$300m) to be completed by 19 Aug 09. The CMBS is secured by the cash flows and mortgage on 17 properties. 14 out of the 17 properties worth about S$944m will be released from the security. Financial flexibility is enhanced with A-REIT having 30 unencumbered properties worth about S$1,868.5m.

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