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IHH associate Parkway Life REIT to repurchase earlier debt with new 3.3 bil yen notes issue

KUALA LUMPUR (March 23): IHH Healthcare Bhd’s 37.5% associate Parkway Life REIT (PLife REIT) has priced its 3.3 billion yen (RM124.9 million) six-year senior unsecured notes at 0.51%, the proceeds of which will be used to repurchase a previous debt issuance.

In a filing with the Singapore Exchange, Parkway Trust Management Ltd — the manager of PLife REIT — said the notes issue is expected to conclude on March 29, 2021. The issuance, due 2027, is in line with its S$500 million (RM1.54 billion) Multicurrency Debt Issuance Programme.

The proceeds from the notes issue will be applied towards repurchasing an earlier March 29, 2016 issuance of 3.3 billion yen 0.58% senior unsecured notes due 2022 at a price of 100% of their principal amount without penalty.

It added that the new notes are priced lower than the existing notes of 0.58%, giving further interest cost savings for the next six years.

“While many countries are trying to rein in the spread of Covid-19 and speed up the rate of vaccination, the current economic outlook remains uncertain and it is crucial for PLife REIT to mitigate any potential refinancing risk by preemptively terming out maturing debts.

“To that end, we have successfully termed out the existing notes due 2022 via the notes issue. The successful pricing of new notes for a further six years at an attractive rate, to repurchase the notes due 2022 at par and without penalty, validates the continual strong support of the Japanese institutional investors and vote of confidence in PLife REIT’s overall investment and growth strategy in Japan,” said Parkway Trust Management CEO Yong Yean Chau in a statement.

Earlier this year, the REIT had disposed of a non-core asset as a move to rebalance its Japan portfolio.

On Feb 5, it announced the sale of P-Life Matsudo for 2.9 billion yen cash to Japanese real estate firm Hulic Co Ltd.

The divested property was Parkway Life REIT's maiden investment in Japan and its only industrial property.

The Singapore-based healthcare REIT owns a well-diversified portfolio of 54 properties with a total portfolio size of approximately S$2.02 billion as at Dec 31, 2020.

It owns the largest portfolio of strategically located private hospitals in Singapore comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital.

In addition, it has 50 assets located in Japan, including one pharmaceutical product distributing and manufacturing facility in Chiba Prefecture as well as 49 high quality nursing home and care facility properties in various prefectures of Japan. It also owns strata-titled units/lots in medical office building (MOB) Specialist Clinics Kuala Lumpur in Malaysia.

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