93
Ascott Residence Trust
Annual Report 2015
FUNDING AND BORROWINGS
Ascott Reit adopts a prudent and disciplined approach
towards capital management so as to ensure financial
flexibility in its funding structure.
In 2015, Ascott Reit continued to actively tap the debt
capital market to diversify its funding sources and
mitigate interest rate volatility by issuing two tranches
of seven-year fixed rate medium term notes. Through
these issuances, the weighted average debt maturity
was extended from 4.4 years as at 31 December 2014
to 4.6 years as at 31 December 2015. The seven year
S$200.0 million medium term notes issued at a fixed
rate of 4.21% in November 2015 were swapped into
Euros amounting to EUR132.0 million at a fixed interest
rate of 1.81% per annum for the same seven year term.
Following the maiden issuance of S$150.0 million fixed
rate perpetual securities in October 2014, Ascott Reit
issued S$250.0 million fixed rate perpetual securities
on 30 June 2015. These perpetual securities are
classified as equity instruments and recorded as equity
in the Statements of Movements in Unitholders’ Funds.
The net proceeds from the issue of the perpetual
securities were deployed to fund the acquisitions in
Australia and US.
As at 31 December 2015, Ascott Reit’s outstanding
borrowings was S$1,815.2 million (2014: S$1,550.9
million), with an interest rate averaging 2.8% per annum
for FY 2015 (2014: 3.0% per annum). The gearing of
the Group as at 31 December 2015 was 39.3% (2014:
38.5%), below the 45.0% prescribed by the Monetary
Authority of Singapore (“MAS”) in the newly revised
Property Funds Appendix of the Code on Collective
Investment Schemes, effective from 1 January 2016.
Moody’s Investors Service, Inc. (“Moody’s”) improved
Ascott Reit’s rating from Baa3 corporate family rating
to Baa3 issuer rating. The outlook for the rating is
stable. Such rating action by Moody’s implies an
improvement of Ascott Reit’s senior unsecured credit
quality, which will now be equivalent to its issuer rating
of Baa3.
2015
Maturity
S$’m %
2016
258.4 14
2017
182.7 10
2018
223.9 12
2019
132.4
8
2020 & after
1,017.8 56
Total
1,815.2
1
100
2014
Maturity
S$’m %
2015
249.3 16
2016
261.8 17
2017
140.0
9
2018
221.3 14
2019 & after
678.5 44
Total
1,550.9
1
100
Debt Maturity Profile
1
Net of unamortised fees and expenses incurred for debt raising exercise.
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
Financials &
Additional
Information
Out of the Group’s total borrowings, 14% falls due in
2016, 10% falls due in 2017, 12% falls due in 2018, 8%
falls due in 2019 and the balance falls due after 2019.
