Suntec REIT

[winston]

Dear ichew,

Thanks for your kind comments. I've already copy & paste your post above into the K-Reit thread.

I will provide you with my thoughts in the K-Reit thread.

Thanks and take care,
Winston

[mocca_com]

suntec have secure a syndicated term loan of SGD825M. This is to refinanace all its borrowings maturing in FY09. With this. it will remove all the uncertainty in it abilty to get refinance. Beside getting the refinance, it distribution manage to go up by 15.9% compare to last quarter.

vested.

Suntec REIT's distribution per unit for Q1 up nearly 16% to 2.9 cents
By Irene Chan, Channel NewsAsia | Posted: 28 April 2009 2057 hrs

SINGAPORE: Suntec Real Estate Investment Trust (REIT) has booked a distribution income of S$46.4 million for the first quarter – up from S$37.6 million in the same period a year ago.

It works out to a distribution per unit (DPU) of 2.918 Singapore cents, up by 16 per cent from a year earlier.

In the first three months ended March, the property trust posted a 15 per cent increase in net property income to S$49 million. It attributed this to higher office and retail revenues achieved during the quarter.

Suntec REIT said its overall committed occupancy for the office portfolio stood at 97.4 per cent as at the end of March.

Looking ahead, it expects its retail performance to remain comparatively stable.

But it said industry reports have suggested that the office leasing market is expected to remain subdued in the first half of this year, with continued pressure on rents.


- CNA/so

http://www.suntecreit.com/Document_Libr ... cility.pdf

[bluechipstamp]

Is anyone surprised by the interest that they managed to re-finance at?

From the horse's mouth:
"The blended all-in interest margin for the S$825m term loan facility is less than 3.75%."

It wasn't too long ago that other REITs were re-financing at 6-7% interest. Credit improving? Hmm.

[cif5000]

Credit should go the REIT Manager. Contrast that to the rights issue of CMT and one can differentiate "management quality".

[mojo_]

From another horse's (CapitaCommercial Trust - not vested) mouth today:

"Recently, CCT has also obtained a commitment letter from a bank for a three-year secured term
loan of up to S$160 million to refinance the remaining outstanding debt maturing this year. Secured
against HSBC Building, the all-in margin for the term loan is 3.0% per annum."

from 6-7% to 3.75% to 3% interest for credit for reits...
another green shoot... or basal stem, as Lena would put it...?

[bluechipstamp]

I emailed Ascendas India Trust to query about this, since they re-financed this month at 7.046% (6% above swap). Here's what this 3rd horse say:

Thank you for your mail. The interest rates indicated for Suntec REIT and CCT are the margins or spreads, which are added to a base lending rate, usually the Singapore Dollar swap offer rate.

Our spread is higher, due to the India country risk premium. Suntec REIT's and CCT's properties are Singapore assets, while Ascendas India Trust's assets are in India. Banks view the risks of the both countries differently, hence the different pricing.

Because the risk level is deemed higher in India, property returns there are also higher. In India, office property yields are more than 10%, while those in Singapore are less than 10%.

We have also evaluated borrowing in India, but the current interest rates there are in the mid teens. We have thus chosen to borrow in Singapore, so that we can generate better returns to Unitholders.

Regards,
Yean Cheng

[LenaHuat]

The explanation is right. Spreads/margins must be added to SWAP rate to get the real borrowing rate.
Spreads/margins is the beta and they differ from corporation to corporation.

[ichew]

"The blended all-in interest margin for the S$825m term loan facility is less than 3.75%."

Hi Lena
Sorry do u mean tat suntec interest rate shld then be SWAP_RATE + 3.75%?
Where can i get this SWAP rate? Is this the SIBOR rate?
Thanks.

[LenaHuat]

Hi ichew

Not at all. It's my pleasure to share in this forum

Yes, the effective rate is the sum of the 2.
SWAP is not SIBOR. Both rates can be found from the Biz Times. In cross-border and cross-currency loans raised in Singapore, SWAP is used. SIBOR is for the domestic credit market. SIBOR does not carry the international prestige of LIBOR.
(note: this is from an otiose housewife).

[LenaHuat]

Here's a note from Std Chartered Bank's website on SOR:

Swap Offer Rate (SOR)
Swap Offer Rate (SOR) is SIBOR plus lending costs incurred by the banks. It is as transparent as SIBOR that reflects market conditions. If your loan is based on the 3-month SOR, your interest rate will be 3-month SOR plus a margin for the Bank and repriced every 3 months. This rate is transparent and published daily in The Business Times.