MMP – BT

Macquarie MEAG to raise S$150m from bond sale

Trust is acquiring more property assets in Asia

MACQUARIE MEAG Prime Reit, which owns stakes in two Singapore downtown malls, plans to raise as much as S$150 million from a bond sale, according to an e-mail sent to investors.

The property trust, which also owns offices in the city-state, hired Citigroup Inc to arrange the sale. Macquarie MEAG is offering investors yield premiums of 30 basis points more than corporate benchmark borrowing rates in Singapore for bonds that mature in a year, and 70 basis points for three-year securities. A basis point is 0.01 percentage point.

Macquarie MEAG is raising more debt as it acquires more property assets in Asia. Its leverage increased to about 34 per cent as of Sept 30, from 25 per cent at the end of 2006, according to the trust.

The Singapore-listed trust owns office buildings and retail malls in Singapore, Tokyo and Chengdu, China.

Macquarie MEAG will likely buy assets similar to those it is holding, which may raise its leverage to between 40 to 45 per cent, according to Moody’s Investors Service on May 14.

The trust is rated Baa1, the third-lowest investment grade, by the credit assessor.

Macquarie MEAG owns 74 per cent of Wisma Atria, whose tenants include the Isetan department store, and 27 per cent of Ngee Ann City, anchored by retailer Takashimaya.

The trust is managed by Macquarie Pacific Star Prime Reit Management Ltd, which is 50 per cent-owned by Macquarie Group Ltd, Australia’s largest securities firm. — Bloomberg