Cromwell EREIT Management Pte. Ltd. (in its capacity as manager of Cromwell European Real Estate Investment Trust (“CEREIT”)) (the “CEREIT Manager”), is pleased to announce that Perpetual (Asia) Limited (in its capacity as trustee of CEREIT) (the “Issuer”) has today priced S$100,000,000 fixed rate subordinated perpetual securities comprised in Series 001 (the “Perpetual Securities”) at a coupon of 5.00%. At the same time, two 5-year cross currency swaps (“CCS”) were entered into to convert the Singapore dollar proceeds into Euro and the Singapore dollar coupon into a fixed rate in Euro of 3.55%. The CCS have a total notional amount of S$100,000,000 with a Euro equivalent of approximately €65.1 million and have a termination date which falls on the First Reset Date (as defined below). The Euro fixed rate is paid semi-annually. There are certain green ESG initiatives that could see the Euro coupon reduce slightly on a notional amount of S$50,000,000 of the CCS if certain targets are met.
CEREIT’s Chief Executive Officer, Mr. Simon Garing, commented: “I am very pleased that CEREIT has priced S$100,000,000 inaugural issuance of perpetual securities today. After transacting a cross currency swap into our functional currency of Euro, the coupon in Euro provides attractive funding, which is treated as equity in CEREIT’s statement of financial position. The perpetual securities market is well-established in Singapore with the securities also being treated as equity for the credit rating assigned by Fitch Ratings Service and also for regulatory purposes.
This is the latest value add initiative in our transformational capital management programme, further diversifying CEREIT’s capital sources enabling it to fund new acquisitions on an accretive basis. We are also pleased that part of our hedging construct includes a green component, which if the targets are met annually will see a small reduction in interest costs.
CEREIT’s pipeline of ‘New Economy’ opportunities are well-advanced in Western Europe, including Germany, the Netherlands, Italy and the UK which provide opportunities to acquire assets at net property income yields well in excess of the Euro equivalent coupon of the perpetual securities issue. If materialised, this will bring CEREIT closer to the stated 50% target in terms of portfolio weighting to the light industrial / logistics sector”.
The Perpetual Securities will be issued under the S$750,000,000 Multicurrency Perpetual Securities Programme (the “Programme”) established by the Issuer on 5 November 2021. DBS Bank Ltd., Oversea-Chinese Banking Corporation Limited and Credit Suisse (Singapore) Limited have been appointed as the joint lead managers for the Perpetual Securities.
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