OUE REIT Management, the manager of OUE Real Estate Investment Trust, has announced that OUE REIT’s wholly-owned subsidiary, OUE REIT Treasury, has completed the issuance of its S$250 million ($184 million) inaugural green notes at a 4.1% fixed rate due 2027.
This marks OUE REIT’s first investment-grade issuance under its S$2 billion multicurrency debt issuance programme and green financing framework established in March 2020 and November 2023.
The REIT owns seven properties, including Crowne Plaza Changi Airport, One Raffles Place, OUE Bayfront, and the Hilton Singapore Orchard. S&P Global Ratings has assigned a “BBB-” rating to the green notes.
Initially guided at 4.35%, the offer achieved a peak order book exceeding S$475 million, 3.2 times oversubscribed based on the initial target size of S$150 million. The final offer was upsized to S$250 million, with pricing tightened to 4.10%, 97.3 basis points over the 3-year Singapore Overnight Rate Average Overnight Indexed Swap (SORA-OIS). The final order book totaled S$425 million, representing an oversubscription of 1.7 times the upsized offer. Approximately 74% of the allocation went to institutional investors.
Post-issuance, the proportion of fixed-rate debt increased from 60% to approximately 70.6% on a pro forma basis as of March 31, 2024, while the weighted average cost of debt remains stable. With the completion of a S$600 million unsecured sustainability-linked loan (SLL) in May 2024, OUE REIT has no refinancing requirements until the second half of 2025, when only 14.4% of the total debt is due. The weighted average debt maturity is expected to extend from 2.2 years as of March 31, 2024, to 2.9 years on a pro forma basis.
OCBC served as the sole global coordinator, while DBS Bank, HSBC Singapore, and OCBC acted as joint lead managers and bookrunners for the notes. The Industrial and Commercial Bank of China, Singapore branch, also acted as a joint lead manager and bookrunner. OCBC was the green finance adviser for the issuance.
