MMP – BT

MMP Reit refinances $220m short-term loans

MACQUARIE MEAG Prime Reit (MMP Reit) has refinanced $220 million of short-term loans, $190 million of which are due in May and $30 million in August.

‘In light of the strategic review of MMP Reit announced on Feb 19, the new funding has been arranged to extend the maturity of the facilities until end-September,’ said Macquarie Pacific Star, the manager of MMP Reit. This will allow the review to proceed with flexibility. It also removes the need to incur additional costs to unwind longer-term loans, which may be necessary if there is a transaction arising from the strategic review, said the real estate investment trust (Reit) manager.

In its Feb 19 announcement on the strategic review, the Reit manager said the specific objective is to enhance value for MMP Reit unit-holders. The review includes the possibility of the Macquarie Group selling its stake in the Reit.

The financing renewals have been secured on competitive terms and will not have a material impact on distribution per unit to unit-holders, the Reit manager said, adding that the successful refinancing – a continuation of support for the trust by finance providers – shows the strong credit quality of MMP Reit.

‘MMP Reit’s creditworthiness is supported by the high quality of underlying assets, low gearing, rental reversions, occupancy levels and tenancies,’ said Macquarie Pacific Star chief executive officer Franklin Heng.

MMP Reit recently announced an increase in its net asset value to $1.61 per unit as at Dec 31, 2007. The Reit is trading at a discount to this value, closing yesterday at $1.22.

‘We remain committed to securing the most optimal financing arrangements to maximise returns to unit-holders,’ Mr Heng said yesterday. ‘We will continue to monitor MMP Reit’s funding position throughout the strategic review.’

MMP Reit posted a 15.7 per cent year-on-year rise in distributable income to $16.2 million for the fourth quarter ended Dec 31, 2007.