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Notes to the financial statements
15. Collateral loan
2010 2009
$’000 $’000
At initial recognition 300,000 -
Change in fair value of collateral loan 390 -
At 31 March 300,390 -
In March 2010, a collateral loan of $300 million was granted by a special purpose vehicle, Ruby Assets Pte.
Ltd. (“Ruby Assets”) to A-REIT. The maturity date of the collateral loan is 1 February 2017 and it bears a fixed
interest rate of 1.60% per annum. The collateral loan may be repaid in whole or in part, at the option of Ruby
Assets, on 1 February 2015 at the early repayment amount. The collateral loan may also be repaid in whole
but not in part, at the option of A-REIT, on or at any time after 1 February 2015, but not less than 7 business
days prior to 1 February 2017. The early repayment amount represents the principal amount of the collateral
loan, together with any accrued but unpaid interest up to but excluding the date of repayment.
The collateral loan can be convertible by Ruby Assets into A-REIT Units at the conversion price of $2.45, at
any time on and after 6 May 2010 up to the close of business on 23 January 2017, or if the collateral loan has
been called for redemption before 1 February 2017, then up to the close of business on a date no later than
7 business days prior to the date fixed for redemption thereof. The Trustee has the option to pay cash in lieu
of delivering A-REIT Units.
As collateral for the loan granted by Ruby Assets, the Trustee of A-REIT has granted in favour of Ruby Assets
the following:
(i)
(ii)
(iii)
(iv)
a mortgage over the properties making up “Portfolio CL” (Portfolio CL includes 19 properties acquired
between July 2004 and April 2005);
an assignment and charge of the rental proceeds and tenancy agreements in the Portfolio CL
properties;
an assignment of the insurance policies relating to the Portfolio CL properties; and
a charge creating a fixed and floating charge over certain assets of A-REIT relating to the Portfolio CL
properties.
In order to fund the $300 million collateral loan to A-REIT, Ruby Assets issued $300 million Exchangeable
Collateralised Securities (“ECS”) on 26 March 2010. The ECS bears a fixed coupon of 1.60% per annum and
have an expected maturity date of 1 February 2017 and a legal maturity date of 1 February 2019.
The ECS are exchangeable by ECS Holders into A-REIT Units at the exchange price of $2.45, at any time on and
after 6 May 2010 up to the close of business on 23 January 2017, or if such ECS has been called for redemption
before 1 February 2017, then up to the close of business on a date no later than 7 business days prior to the date
fixed for redemption thereof. Ruby Assets has the option to pay cash in lieu of A-REIT Units.
142 Ascendas real estate investment trust