Ascott REIT skips redemption of $250m perpetual issue

The REIT is prioritising the preservation of cash flow and liquidity.

Ascott Residence Trust will not be redeeming its $250m, 4.68% fixed rate perpetual issue on 30 June, the REIT announced in an SGX filing.

“The distribution rate applicable to the securities shall be reset on 30 June 2020 as the securities would not be redeemed on 30 June 2020,” the announcement read.

The decision was made as the REIT moved to preserve cash flow and liquidity amidst the ongoing pandemic, which has led to lower demand for accommodation.

“Drawing down on debt to redeem the Securities will increase ART’s leverage and reduce the debt headroom available for acquisition opportunities during a market recovery. Furthermore, ART’s property valuations could come under pressure on the back of the softer operating performance, potentially increasing ART’s leverage further,” the REIT said, adding that current market conditions are not favourable for the issuance of perpetual securities.

The reset distribution rate will be determined based on the swap-offer rate plus the fix spread per annum.

Also Read

COTD: APAC deal volume falls 6.8% amidst economic uncertainties and tensions

Securitisation seen as key for Singapore developers to enhance returns

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit