MI-REIT – BT
MI-Reit clears conditions for further debt extension
$202.3m debt facility now due to Aussie lenders on Dec 31
THE managers of MacarthurCook Industrial Reit (MI-Reit) – MacarthurCook Investment Managers (Asia) Ltd – announced yesterday the fulfilment of conditions needed for the extension of MI-Reit’s $202.3 million debt facility.
The facility will now come due on Dec 31 and is MI-Reit’s second extension in a bid to negotiate longer- term refinancing of its debt with lenders National Australia Bank and Commonwealth Bank of Australia.
At the end of March, MI-Reit was granted its first extension – a 60-day one for its $220.8 million debt facility that would have matured in April.
The debt facility’s limit was later reduced to $202.3 million as part of the second extension approved in May, with an ‘all in interest margin’ of 5 per cent per annum.
This debt facility accounts for about 90 per cent of its borrowings, with the remainder based in Japan, which the firm is also trying to refinance.
The extension had been subject to documentation and satisfaction of certain conditions precedent, which the investment managers stated were ‘within the control of MI-Reit’.
MI-Reit declined to elaborate on what the conditions were when contacted by BT yesterday.
Under the terms of the second extension, an event of default under the extension includes a failure by MI-Reit to settle the acquisition of a property in the International Business Park.
‘The manager understands the settlement of the property is likely to occur late fourth calendar quarter 2009,’ MI-Reit’s manager stated late last month. ‘The manager, together with its adviser, Standard Chartered Bank Ltd, is considering the most appropriate longer-term capital structure for MI-Reit inclusive of funding options for the property.’
For its fourth quarter ended March 31, MI-Reit posted a 13.9 per cent drop in distribution to unitholders, from $5.8 million to $5 million for the quarter, year-on-year.
For the full year, however, it saw a 19.4 per cent increase in distribution to unitholders, with net property income rising 48.5 per cent to $36.9 million.