A-Reit raises S$300 million from collateralised exchangeable

The innovatively structured deal gets a triple-A rating from both Moody's and S&P, allowing the Singapore-listed trust to achieve a coupon of just 1.6%.

Ascendas Real Estate Investment Trust A-Reit last night raised S$300 million $215 million from an innovatively structured exchangeable bond -- referred to as exchangeable collateralised securities -- that it will use to buy back an outstanding issue of commercial mortgage-backed securities CMBS.

The outstanding 165 million roughly equal to S$300 million CMBS doesn't mature for another two years, but by buying it back early -- at a price slightly below par -- A-Reit will extend the average life of its debt to 4.5 years from 2.4 years now and reduce its cash interest payments.

To get the best possible pricing, the exchangeable is secured by 19 properties with a combined value of S$937 million...

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