Download Full Report - Ascendas REIT

was in view of the significant
amount of refinancing expected
in the Singapore REITs sector in
2012. 23 properties worth about
S$1,223.4m were released from
the security pool
• Issuance of the first ever S$300m
ECS due 2017 with a put option
in 2015 at a coupon of 1.6% p.a.
and exchange price of S$2.45
which was over 50% premium
over A-REIT’s current NAV.
19 properties worth about
S$935.2m were provided as
security for the ECS
• Extension of a S$300m term
loan due in March 2010 by 7
years to March 2017
The ECS, which was rated “AAA”
by S&P and “Aaa” by Moody’s,
has allowed A-REIT to diversify
its sources of debt financing. With
a quality underlying portfolio and
an understanding of investors’
needs, the Manager was able to
tap a new investor base in the
international capital markets and
obtain very competitive mediumterm
debt financing.
Consequently, A-REIT’s weighted
average debt maturity was extended
from 2.2 years to 4.0 years.
Liquidity Risk Management
Despite the challenging credit
market environment in the first
half of 2009, the Manager had
successfully diversified A-REIT’s
sources of debt funding through
proactive capital management
initiatives to mitigate any potential
liquidity risk. The issuance of the
medium term notes in 2009 and the
ECS in 2010 has reduced A-REIT’s
reliance on any single source of
debt funding as follows:
Commercial Mortgage 26.0%
Backed Securities
Exchangable Collaterised 19.7%
Securities
Term Loan Facility 19.7%
Medium Term Note 18.1%
Committed Revolving 13.1%
Credit Facility
Revolving Credit Facilities 3.4%
As at 31 March 2010, less than
30% of A-REIT’s credit facilities were
utilized, and about S$2.5bn of its
properties (representing 53.0% of
total investment properties) were
free from encumbrance, thereby
providing greater flexibility to
manage its capital and balance sheet.
With diversified sources of funding
and a well-spread debt maturity
profile, A-REIT is well positioned to
manage its refinancing and liquidity
risk at an acceptable cost of interest
to ensure a sustainable stream of
distributions to Unitholders.
Interest Rate Risk Management
The Manager continued to adopt
a prudent stance on interest rate
exposure. As at 31 March 2010, the
weighted average cost of funding
increased from 3.67% a year ago
to 3.94% due to higher interest
margins required by lenders.
Aggregate leverage was 31.6% as at
31 March 2010 and was 34.0% after
the acquisition of DBS Asia Hub was
funded in early April 2010. 100% of
A-REIT’s interest rate exposure is
fixed for the next 3.1 years.
Tenant and Credit Risk Management
The Manager has an established
credit evaluation process to assess
the creditworthiness of customers
to minimize potential credit risk.
Monthly total gross rental income
of the top ten tenants remained
constant at approximately 26.8% as
at 31 March 2010. The portfolio has
8th Annual Report FY09/10
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