KUALA LUMPUR: Axis Real Estate Investment Trust (REIT) is expected to issue sukuk bonds worth RM300 million in the near-term to refinance its short-term debt, extend its debt expiry profile and lock in lower interest rate.

As at Sept 30, Axis REIT short-term debt stood at RM340 million, with RM198 million due this year.

However, it is likely REIT may draw down a portion first, given the revolving credit due to the maturity in 2011, and planned unit placement, HwangDBS Vickers Research said in a statement on Monday, Oct 24.

"At 38.2% gearing (Sept 30) based on total asset value, the company could still take on around RM151.1 million in debt before hitting the 50% threshold.

"This is unlikely as impending capital management exercises should supplement its existing funding for asset acquisition purposes and bring it to a more comfortable low around 30% level," it said.

The research firm maintained its "buy" call on the REIT and reduced the target price by 15 sen to RM2.75 from RM2.90. — Bernama

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