Manulife US REIT - DBS Research 2023-07-19: A Case Of Too Little, Too Late

• In the latest updated asset valuation as of 1H23, Manulife US REIT’s portfolio valuation declined by 14.6% to US$1.6bn vs US$1.9bn as at Dec 22. See Manulife US REIT's announcement dated 18 Jul 23.

Gearing spikes to 57% with another 15% decline in asset valuation

• - Read this at SGinvestors.io -
• While the gearing limit does not by itself constitute a breach, it has three other major implications on Manulife US REIT:
  1. - Read this at SGinvestors.io -
  2. cross default of interest rate swaps, which will subject Manulife US REIT to higher interest rates for its loans, and subsequently impact the ICR ratio; and
  3. potential implications on distributions to be declared, with Manulife US REIT expecting to report a loss in its 1H23 financial results.
• Manulife US REIT is currently in discussions with its lenders
  1. to waive the breach of the financial covenants,
  2. exploring an option to lower the ratio of total unencumbered debt vs unencumbered assets, and
  3. seeking approval to declare distributions.
• In the announcement, Manulife US REIT mentioned that the manager and sponsor are exploring a potential alternative method with its lenders, which may address Manulife US REIT’s mid and long-term liquidity needs.

Details on the asset valuation decline.

• Read more at SGinvestors.io.

Rachel TAN DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2023-07-19 SGinvestors.io

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