This article is from the Australian Property Journal archive
MACQUARIE Office Trust is also lining up for a capital raising before the end of the first of FY09.
MOF is the third trust this month, following in the footsteps of Dexus Property Group and ING Office Fund which have raised $301.6 million and $400 million respectively, to join the queue of companies looking for institutional cash injection.
This is also the third consecutive month property trusts have raised billions of dollars. So far, Goodman Group collected $955 million; GPT raised $1.6 billion; Mirvac $500 million; Stockland $300 million and Australand $461 million.
The market is speculating that MOF could be looking to raise at least $300 million, to meet its substantial debt repayments.
MOF and its sisters Macquarie CountryWide Trust ($2.5 billion debt), and Macquarie DDR Trust ($523 million debt) have the largest exposure to commercial mortgage backed securities debt in the A-REITs sector.
Behind Centro, Fitch Ratings research shows MOF has the second largest refinancing task in the near term.
According to Merrill Lynch, the MOF’s syndicated and debt tallies up to $1.71 billion and total CMBS debt is $1.97 billion.
In the near term, the trust has $55 million of debt maturing in the next six months to June 30, 2009.
In addition, MOF has $1.39 billion debt expiring in FY10 including CMBS $1.13 billion debt in September 2009.
In a report, ML analyst John Kim said the trust is aiming to refinance the CMBS portion ($570 million) with cash reserves, realization of hedge books and utilising un-drawn debt capacity.
Kim added that the difference of $192 million may be funded through substituted borrowings secured against a pool of assets, but it views the refinancing as a significant risk.
“Assuming that MOF is unable to refinance the syndicated debt and pay down the CMBS as it falls due, we estimate that the company would need to raise a 2-for-1 entitlement offer (1.9x current market cap) in order to meet the liability as it falls due,” he continued.
MOF yesterday requested a back to back trading halt and expects to make an announcement of its capital management initiative in four days.
Australian Property Journal
