Suntec REIT expected to raise S$341.4m from private placement

218.1m new units has been issued.

Suntec REIT has announced that it will be issuing 218.1m new units at S$1.605 apiece following the close of the private placement, and OCBC Investment Research foresees approximately S$341.4m in net proceeds after subtracting expenses relating to the equity fund raising.

The issue price is nearer to the upper range of S$1.575-S$1.615 per unit proposed during the launch of the placement, noted the research firm, and represents a discount of 4.7% to the VWAP.

"We expect the unit base to increase by 10.5% following the issue of new units (expected 27 Mar)," said OCBC.

"Management intends to use the proceeds to repay its existing debt, which is likely to reduce its debt burden and aggregate leverage from 39.1% as at 31 Dec 2013 to 35.0%," it added.

"In connection with the placement, Suntec REIT also intends to make an advanced distribution of ~2.096 S cents/unit for the period from 1 Jan to 26 Mar 2014 (being the day prior to the issue of new units)," it said further.