A-Reit

A-Reit: proposing to carry out a private placement of 150m new units (7.2% of units out) to institutional and other investors at an issue px of btwn $1.99 – 2.04 per unit. The last traded was $2.09. Net proceeds will amount to btwn $294 – 301.4m, to be used as follows, i) $57m for asset enhancement initiatives (AEI) for 9 Changi South Street 3 ($14.6m) and Tech Place II ($42.4m). ii) $100.3m for construction costs of the business park devt at Fusionopolis ($68m), and of the Unilever Four Acres Singapore built-to-suit facility ($32.3m) iii) $90 to fund the fwd purchase of a business space property located at No. 200 Jinsu Rd, Jinqiao Export Processing Zone, Shanghai, China iv) $46.5m for general corporate and working capital purposes. Based on the min Offer Px, A-Reit’s aggregate leverage is expected to decrease from 36.6% to 34.6%. Citi, JPM are the joint lead mgrs and underwriters. Prior to the placement, A-Reit trades at 6.75% FY13e consensus yield.