Keppel-KBS US REIT sets rights issue to finance Westpark Portfolio acquisition

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Keppel-KBS US REIT’s manager said on Monday that it would finance the acquisition of the Westpark Portfolio via a renounceable rights issue of 186.24 million new units to raise around US$93.1 million.

In late September, Keppel-KBS US REIT’s manager said it entered a deal with KBS SOR Westpark Portfolio to acquire the Westpark Portfolio, a business campus with 21 freehold buildings in the Seattle-Tacoma-Bellevue metropolitan statistical area, for US$169.4 million.

The rights issue will be offered at a ratio of 295 rights units for every 1,000 existing units of Keppel-KBS US REIT at the time of book closure for an issue price of US$0.50 each, which is a discount of around 30 percent from the US$0.715 closing price on Monday, it said in a filing to SGX after the market close.

Around US$89.7 million of the proceeds will be used to partially fund the acquisition, with the rest to be used for expenses connected to the rights, the REIT manager said.

The book closure data will be 30 October for the purpose of determining eligibility, it said. The units will trade on an “ex-rights” basis from 26 October, it said.

Keppel Capital Investment Holdings (KCIH) and KBS SOR Properties (KBS SORP), each of which hold around 6.97 percent of the REIT’s units, have irrevocably undertaken to subscribe to their full rights allotment, it said.

DBS Bank and UOB have been appointed joint lead managers for the rights issue, while DBS Bank, UOB and Credit Suisse (Singapore) are the joint underwriters, it said.

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