OUE Real Estate Investment Trust (Reit) has completed the issuance of its S$250 million inaugural green notes at a 4.1 per cent fixed rate due in 2027.
The Reit’s manager announced in a bourse filing on Friday (Jun 14) that the issuance attracted strong investor demand, with a final order book of S$425 million, indicating an oversubscription of 1.7 times over the final upsized offer.
The manager added that at the initial price guidance of 4.35 per cent, the offer achieved peak orderbook in excess of S$475 million, 3.2 times oversubscribed based on the Reit’s initial target size of S$150 million.
Subsequently, the final offer was upsized to S$250 million and pricing was tightened to 4.1 per cent.
Approximately 74 per cent of the final allocation went to institutional investors.
The notes, rated BBB- by S&P Global Ratings, represent OUE Reit’s first investment-grade issuance under its S$2 billion Multicurrency Debt Issuance Programme and the Green Financing Framework established in March 2020 and November 2023, respectively.
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Post-issuance, the Reit’s proportion of fixed-rate debt has increased to about 70.6 per cent from 60 per cent as at Mar 31, 2024, on a pro forma basis, while the weighted average cost of debt is expected to remain largely stable.
This “will help mitigate the impact of rising interest rates on OUE Reit’s earnings”, said Han Khim Siew, chief executive officer of the Reit’s manager.
Together with the completion of the S$600 million unsecured sustainability-linked loan in May 2024, the Reit has no refinancing requirements until the second half of 2025, when 14.4 per cent of the total debt is due.
The manager added that the Reit’s weighted average debt maturity is expected to lengthen from 2.2 years as at Mar 31, 2024, to 2.9 years on a pro forma basis.
In an earlier announcement on Jun 5, the manager stated that the notes are expected to be listed on the Singapore Exchange on or about Jun 18.
OCBC is the sole global coordinator and green finance adviser, while DBS, HSBC’s Singapore branch and OCBC were named joint lead managers and bookrunners for the notes-offering.
The Singapore branch of the Industrial and Commercial Bank of China is the joint lead manager and bookrunner (no book) of the offering.
Prior to the announcement, units of OUE Reit closed flat at S$0.265 on Friday.
