Ascendas Real Estate Investment Trust, established in 2002 by Ascendas MGM Funds, priced last Tuesday its second cross-border CMBS offering. The Singaporean REIT issued 165 million ($211.3 million) of 7.5-year paper via lead manager BNP Paribas, in a deal that ended slightly smaller than the expected 181 million.
The transaction is secured by a S$380 million (US$230.8 million) loan advance held over 23 industrial and commercial properties located in Singapore. There was no cross-collateralization between the properties included in this deal and its debut offering from August 2004, an 142.5 million CMBS via JPMorgan Securities and Overseas-Chinese Banking Corp., which priced at 33 basis points over Euribor (see ASR 8/9/04).
After holding roadshows in various European destinations, the notes - rated triple-A by Fitch Ratings and Standard & Poor's - priced at 23 basis points over Euribor, at the middle of the indicative range.
That was seven points outside the Singaporean CMBS benchmark, set by Suntec REIT at the end of March with its 327 million issue arranged by JPMorgan. However, there has been some widening in the Euro market since then. Also, given that Suntec's deal featured prime commercial and retail properties, while Ascendas was securitizing traditionally more volatile industrial assets, the result was a good one in the current market.
With the marketing effort fully concentrated on Europe, the whole deal placed on the continent, again emphasizing how Singaporean CMBS has become a sought after asset-class. Some rival bankers were not entirely happy about the allocation, however.
"It is obviously a good development that Europe is showing strong appetite for Asian deals and it's natural the lead would tap into its main investor base," commented one head of ex-Japan ABS. "However, I think this may be the first time the a Singapore CMBS deal has placed out of Asia in its entirety. We still need to build a solid investor base in Asia, so some allocation in the region would have been beneficial."
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