SINGAPORE - Lippo Malls Indonesia Retail Trust's (LMIRT) wholly owned subsidiary, LMIRT Capital Pte Ltd, has priced its inaugural US$250 million ($341.6 million) five-year guaranteed senior notes at 7.25 per cent, to be sold below par.
The unsecured, unsubordinated notes are unconditionally and irrevocably guaranteed by LMIRT's trustee, Perpetual (Asia), the manager of LMIRT said in a bourse filing on Thursday (June 13).
They will be issued at a discounted price that is 98.973 per cent of the principal amount, and will mature on June 19, 2024.
The notes' US-dollar proceeds will be subsequently swapped into Singapore dollars with a fixed yearly interest rate of around 6.75 per cent, under a swap transaction which has been entered into.
The Singapore-based real estate investment trust's (Reit) manager said that the notes received a "robust response" from fixed-income investors in Asia and Europe.
The final order book stood at more than US$475 million from 58 investor accounts.
By geography, 78 per cent of the bonds were sold to Asian investors, while the remaining 22 per cent went to European or offshore US investors. The investor base was spread over high-quality institutions, insurance companies and private banks.
They are LMIRT's maiden US-dollar bond offering, as well as Asia-Pacific's first US-dollar high-yield bond issued by a Reit, the manager said.
Proceeds will mainly be used to refinance the majority of the Reit's debt maturing in 2019 and 2020. This will extend its weighted average debt maturity from two years to more than 4.3 years.
The weighted average debt maturity does not consider its two perpetual securities - $140 million callable in 2021 and $120 million callable in 2022.
LMIRT's gearing stood at 33.9 per cent as at March 31, with 58.1 per cent of debt on a fixed-rate basis to mitigate fluctuating interest rates. All of its debt is also unsecured.
Its proposed acquisition of Lippo Mall Puri, a shopping mall in West Jakarta, is scheduled to complete in the second half of 2019.
The Reit received a corporate family rating of "Ba3" from Moody's Investors Service, and an expected long-term issuer default rating of "BB" from Fitch Ratings Singapore. Both agencies gave a stable outlook. The notes are expected to be rated "Ba3" by Moody's and "BB" by Fitch.
The joint lead managers of the notes issue are BNP Paribas; CIMB Bank Berhad acting through its Singapore branch; Credit Suisse (Singapore) and Deutsche Bank AG, Singapore Branch.
The Singapore Exchange (SGX) has given approval in-principle for the listing and quotation of the notes on the bourse.
LMIRT has a portfolio of 30 income-producing retail assets in Indonesia - comprising 23 malls and seven retail spaces in other malls.
Its units on the SGX mainboard were trading flat at 22.5 cents as at 1.08pm on Thursday.