Lippo Malls Indonesia Retail Trust priced a US$250 million five-year bond offering at 7.25 percent, in Asia’s first U.S. dollar high-yield bond issued by a REIT, the trust said in a filing to SGX Thursday.
The offering met with a “robust response” from fixed income investors in Asia and Europe, with 78 percent of the bonds sold to Asian investors and the remainder to European and offshore U.S. investors, LMIR Trust said.
The investor base included high quality institutions, insurance companies and private banks, the trust said.
“This is the trust’s inaugural U.S. dollar bond offering, allowing us to diversify our financing tools and to tap on both a wider institutional investor base and new currency markets for our funding resources,” James Liew, CEO of the REIT’s manager, said in the statement.
“Proceeds from the notes will primarily be used to refinance the majority of our debt maturing this year and in 2020, thereby extending our weighted average maturity of debt from 2.0 years to over 4.3 years,” he added.
The notes will be issued at 98.973 percent of the principal amount, the filing said.
The trust also said it entered a swap transaction to swap the U.S. dollar proceeds into Singapore dollars at a fixed interest rate of around 6.75 percent, the filing said.
BNP Paribas, CIMB Bank’s Singapore branch, Credit Suisse (Singapore) and Deutsche Bank’s Singapore branch were appointed joint lead managers, LMIR Trust said.
The notes are expected to be rated Ba3 by Moody’s and BB by Fitch, LMIR Trust said.
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