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Home > About Us > Growth Strategy > Capital and Financial Management

Capital and Financial Management

Through ongoing dynamic capital and financial management, PLife REIT has strengthened its financial position to ensure continuous access to funding at optimal cost, as well as stable distributions to Unitholders and steady Net Asset Value.

Ample funding sources

PLife REIT has adequate and diversified financing sources to support its future growth. In a continuous effort to further broaden its funding sources, PLife REIT in 2011 secured three S$50.0 million uncommitted and unsecured Short Term Revolving Credit Facilities, which will be used to fulfil its ad-hoc cash flow requirements and provide greater flexibility for enhanced liquidity risk management at minimal standby costs.

Healthy gearing level

As at 31 December 2011, PLife REIT's gearing remains at a healthy 34.8 %, well within the 60% limit allowed under the Monetary Authority of Singapore's Property Funds Guidelines and providing additional debt headroom for further growth. It also has a strong BBB investment grade credit rating from Fitch Ratings.

Interest rate and foreign exchange risk management

PLife REIT has substantially hedged its floating rate loans and net foreign income until FY2013 and beyond, minimising any potential interim negative impact to its distribution, and improving its resiliency against potential interest rate risks and foreign exchange risks.

Dynamic loan portfolio management

PLife REIT dynamically manages its loan portfolio to eliminate near-term refinancing risks and ensure that cost of debt remains competitive. Some recent initiatives include:

• Pre-emptive refinancing of a JPY13.66 billion loan facility ahead of its due date in 2H 2011 (announced 16 August 2010)
• Re-pricing of credit spread of an existing JPY5.3 billion loan facility (announced 24 January 2011)
• Extension of interest rate swap hedges with notional amount of JPY 13.66 billion (approximately 45% of total loan portfolio) at a lower interest rate for an average of 3.5 years (announced 4 August 2011).

These initiatives have resulted in significant interest cost savings, lower all-in cost of debt and extended PLife REIT’s debt maturity profile, with the nearest refinancing requirement in FY2013.

For more details, please refer to PLife REIT’s announcements on www.sgx.com.