Thursday, September 26, 2013

Lippomalls reit update

LMIR announced that LMIRT Capital Pte. Ltd. (wholly-owned subsidiary of
Lippo Malls Indonesia Retail Trust) has priced its S$150,000,000 4.25% Notes due 2016 (the
“Notes”). 

http://infopub.sgx.com/FileOpen/Pricing_announcement_Series_4_MTN_Programme_25_Sep_2013_final.ashx?App=Announcement&FileID=257580

The notes should be used to refinanced the secured bank loans of $147.5 million that is due in 2014.

This new facility is attractive is a few areas.

1) Note rate is 4.25% compared to the interest of 4.29% incurred in 2012 and 4.5% in 2011

2) MTN note is an unsecured loans, usually secured loans fetch a slighly lower interest rate as properties are pledged as an collateral, so this deal is attractive as the free up properties to become unencumbered, and yet attract a lower rate

The tenure of the secured bank loan and the notes are both 3 years, so Lippomalls has gotten a better deal.

But there in insignificant savings in the reduced finance costs. But given the next refinacing will come in 2015, we should have more clarity, and operational numbers, aside, we can quite safetly assumed finace costs will not have a big impact for the next 3 years.

 

 

Will provide another update after their quarterly report

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