While it has not redeemed the issue on the first call date, ART has the option to call the perpetual every six months after June 30.
ART’s managers have said they took into account the longer-term interests of the trust and the current macroeconomic environment in deciding not to call the perpetual issue. The factors they considered included the expectation that ART’s financial performance would be adversely impacted, as it has been blindsided by the novel coronavirus pandemic hitting its occupancies and room rates.
Drawing down on debt to redeem the perpetual would increase ART’s leverage and reduce the debt headroom available for acquisition opportunities during a market recovery, the managers said. Its property valuations could come under pressure on the back of the softer operating performance as well, which would potentially push ART’s leverage higher, they added.
ART is a stapled group comprising Ascott Reit and Ascott Business Trust; managers for both are wholly-owned subsidiaries of Singapore-listed CapitaLand. The perpetual was trading at 95.113 when markets closed on Monday. ART units ended at S$0.99 or two Singapore cents lower, before this announcement was made.For daily updates on weekdays and specially selected content for the weekend. Subscribe to