TWO new perpetual securities from real estate investment trusts (Reits) are coming to the market.

 

CapitaLand Retail China Trust (CRCT) on Tuesday priced S$100 million in surbordinated perps, which have no fixed redemption date, with distribution at 3.375 per cent annually for five years.

 

Subsequent distribution will be based on swap offer rate - or its successor rate - plus the initial spread of 2.875 per cent, if the perps are not redeemed.

 

Meanwhile, the trustee of Suntec Real Estate Investment Trust (Suntec Reit) has priced S$200 million in subordinated perps at 3.8 per cent, the Reit manager said on Monday night.

Net proceeds from the issue will be used by the Reit and its subsidiaries for refinancing existing borrowings, financing or refinancing acquisitions and/or investments, financing any asset enhancement works which it has an interest in, as well as general corporate purposes. The new perps are expected to be issued on Oct 27, subject to the satisfaction of customary closing conditions. Distributions will be payable semi-annually starting April 27, 2021.

 

The rate of distribution for the perps will be 3.8 per cent per annum from Oct 27, 2020, to Oct 26, 2025. For the period from Oct 27, 2025, and each reset date following, the reset rate of distribution will be a rate equivalent to the swap offer rate or such other successor rate.

 

If there is no successor rate, the reset rate of distribution will be an alternative reference rate, plus the initial spread of 3.295 per cent.