SGD New Issue Review : ASCENDAS REIT SGD 7YR 3.375%


Issuer:   HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of A-REIT)
Status:  Senior, unsecured, off SGD5 bio Multicurrency Medium                          Term Note Programme
Issuer Rating: A3 stable (Moody’s)
Exp Issue Rating:A3 (Moody’s)
Format: Reg S, S274 & 275 of Singapore SFA
Tenor: 7 Years
Issue Size:  TBD
Initial Price Guidance:  3.375% area
Payment: Semi-annual, Actual/365 (fixed)
Issue Date: [●] June 2015
Maturity Date:[●] June 2022
Redemption upon
Delisting of A-REIT:  At par, in accordance to the Programme
Redemption upon Termination of A-REIT:   At par, in accordance to the Programme
Details: SGD250,000/SGX-ST/CDP/Singapore Law
Sole Bookrunner: DBS
Timing:  As early as today


–  New Ascendas Reit SGD 7y announced, anchored by reverse enquiries
–  Initial price guidance at 3.375% area
–  Expected issue rating: A3 (Moody’s)
–  Timing:  As early as today

AReit 4 % 2022 (A3) at 104.75, 3.20%
CapitaLand Mall Trust 3.48% 2024 (A2) at 101.75, 3.25%
Starhill Global Reit 3.4 2023 (BBB+/*) at 100.18, 3.37%

Mkt Cap S$ 6.1 bio. Divd Yield 5.75%.

Last share price S$2.53, well above book value of $2.08.

areit price book

7 year rate 2.36% which gives up a credit premium of just over 1% for this bond – WOW !! Much better than the Starhill deal 2 weeks ago or the Mapletree Industrial Trust done last month where both paid under 1% for 8 years.

Well, we cannot have A-Reit increasing their size of their MTN programme from S$ 1 bio to S$ 5 bio ! (5 times) in March without having them issue some bonds after that !

March 2 (Business Times) — ASCENDAS Funds Management (S) Limited on Monday said that the maximum aggregate principal amount of notes that may be issued under the multicurrency medium term note programme has been increased from S$1 billion to S$5 billion.
The manager of Ascendas Real Estate Investment Trust (A-Reit) said that this is with effect from March 2.
The net proceeds arising from the issue of the notes (after deducting issue expenses) will be used towards financing or refinancing the acquisitions and/or investments of A-Reit and any development and asset enhancement works initiated by A-Reit or any trust, fund or entity in which A-Reit has an interest.
The funds will also go towards on-lending to any trust, fund or entity in which A-Reit has an interest; financing the general working capital purposes of A-Reit and its subsidiaries (if any); and refinancing the existing borrowings of the group.


Lucky that A-Reit has nothing much to do with the Temasek merger with JTC earlier this year and we should expect business as usual unlike the case of the Ascendas perpetual bond which are being tendered back at 101 after the change of control clause was triggered.

Chances of A-Reit delisting ?

Then why would they increase the MTN programme ?

More likely a buying spree to bolster their falling rentals and EPS.

For this heavyweight name, the 2nd largest reit in Singapore space, I would expect this fairly priced coupon to sell given that HDB is going at 2.6% for 8 years and government bonds are giving about 2.15%.

Good luck.