Starhill Global REIT debt notes assigned ‘BBB-’ rating

SINGAPORE: Standard & Poor's Ratings Services had assigned its 'BBB-' issue rating to the S$2 billion (RM4.72 billion) multi-currency medium-term notes program (MTN) of Starhill Global REIT MTN Pte Ltd, a unit of HSBC Institutional Trust Services (Singapore) Ltd. (HSBCIT).

HSBCIT, in its capacity as trustee of Starhill Global Real Estate Investment Trust (SGREIT; BBB/Stable/--), unconditionally and irrevocably guarantees all notes issued under the program.

"In our opinion, the MTN program will improve SGREIT's liquidity position. The proceeds from the MTN issue will be used to refinance/finance SGREIT's acquisitions, asset enhancement works, share buybacks, working capital, or for other corporate purposes.

"We have rated the MTN program one notch lower than the corporate credit rating on SGREIT to reflect the senior unsecured nature of the company's debt obligations.

A five-year S$380 million term loan and a two-year S$190 million term loan constitute SGREIT's senior secured debt obligations, which represented more than 20% of the company's total outstanding assets as at March 31, 2010.

The term loans are secured by, among other things, first and second legal mortgages on SGREIT's Singapore properties. Both the term loans are expected to mature in September 2010.

SGREIT has received a committed facility proposal from banks of up to S$620 million to refinance the debts due in September 2010.

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