LMIR Trust obtains S$200mn term loan facility

Facility secured at a competitive interest margin of 4% per annum is aimed to refinance existing term loan of S$125mn and for future asset acquisitions.

LMIRT Management Ltd., as manager of Lippo Malls Indonesia Retail Trust (“LMIR Trust”), is pleased to announce that HSBC Institutional Trust Services (Singapore) Ltd, as trustee of LMIR Trust (the “Trustee”), has on Wednesday entered into a facility agreement with the Singapore branches of CIMB Bank Berhad, Credit Suisse AG, Standard Chartered Bank, and UBS AG, to obtain loan facilities of up to S$200 million from the banks, including a committed S$150 million 2.5-year term loan facility and an uncommitted S$50 million 3-year loan facility. The term loan facilities will bear an interest margin of 4.0% per annum over the relevant swap rate to be determined closer to the drawdown date, according to an LMIR Trust report.

The S$150 million term loan is expected to be drawn down in the fourth quarter of the year ending 31 December 2011. Part of the proceeds from this facility will be used to refinance LMIR Trust’s existing term loan facility of S$125 million due on 26 March 2012.

Ms Viven G. Sitiabudi, Chief Executive Officer of the Manager, said, “In light of the volatile global economic environment and increasingly challenging credit environment, we have taken the necessary steps to proactively manage our debt maturity and stabilise our cost of debt capital.”

”We are pleased to have secured the term loan facility from four international banks whom we have established good working relationships with, further widening LMIR Trust’s access to capital. The attractive spreads on the Facility are a testament to the quality of LMIR Trust’s portfolio assets, the REIT’s creditworthiness and confidence in the robust Indonesian economic environment.”

“Post the draw-down of S$150 million term loan and completion of the refinancing, LMIRT Trust will have approximately S$500 million of unencumbered assets for further financing flexibility for its growth.”

LMIR Trust was renamed Lippo Malls Indonesia Retail Trust after PT. Lippo Karawaci Tbk (“LK”) increased its interests in LMIR Trust and the Manager to 29.5% and 100% respectively, in May 2011. LK is the largest listed property developer and mall operator in Indonesia, operating 25 malls representing approximately 25% of the retail mall market in Indonesia.

LMIR Trust is a core component of LK’s third pillar of growth, the Lippo Malls group.

LK has plans to facilitate the injection of some US$2 billion (approximately S$2.56 billion) of mall assets into LMIR Trust over the next three years. This will add to LMIR Trust's S$1.08 billion mall assets that it currently owns and significantly expand the mall assets portfolio of LMIR Trust.