Property operator TMAN concludes sale of Bt1.8 bn debentures
TREIT has marked a first for a real estate investment trust in Thailand by issuing debentures worth Bt1.8 billion, said TMAN, the manager of the fund.
The issue was fully sold out after strong investor interest, the company said.
Rated A-(tha) by Fitch Ratings, the debt holds three-year and seven-year tenors. The company plans to use the proceeds to repay bank loans in order to reduce finance costs. The company is also seeking new assets to increase the size of the trust, and is conducting a feasibility study on the conversion of TICON’s property funds into TREIT.
Peerapat Srisukont, managing director of TICON Management (TMAN), the REIT manager of TICON Freehold and Leasehold Real Estate Investment Trust (TREIT) said the issuance was “name-registered, unsubordinated guaranteed debentures”.
The tenors of the debentures are three-year worth Bt800 million with a coupon rate of 2.98 per cent a year and maturity in 2020 and a seven-year instrument worth Bt1 billion with a coupon rate of 4.18 per cent a year and maturity in 2024.
The issuance received strong support from institutional investors, including mutual funds, insurance companies, saving cooperatives, securities companies and commercial banks, the company said.
It said investors are confident in TREIT as its assets are now being invested in TICON Group’s factories and warehouses, with the potential of TREIT itself to generate desirable return on investment.
“Apart from the issuance of the debentures, TMAN plans to acquire more assets at home and abroad for TREIT.
The company said negotiations with asset owners are well under way, and acquisitions of these assets are expected to be completed in the second quarter.
“Moreover, TMAN is doing a study on the conversion of property funds managed by TICON Group, including TFUND, TLOGIS and TGROWTH into TREIT. Upon completion of the conversion, it is expected that the total asset size of TREIT will reach Bt30 billion, making TREIT one of the most competitive trusts in the region as planned.” Peerapat said.
TMAN manages TREIT, a real estate investment trust fund that mainly invests in factories and warehouses held by TICON Group, whose total asset value is Bt7.771 billion. TREIT is the only trust fund in Thailand now being assigned credit ratings of A- from Fitch Ratings, the company said.
