- Manulife US REIT has announced a drop in valuation of 14.6% or US$280m after conducting a mid-year review, which caused aggregate leverage to spike to 57% as of Jun 23. The erosion of capital values was more severe than anticipated. The breach of the financial covenant could trigger a cross default of its interest rate swaps and lower regulatory limit for aggregate leverage from 50% to 45%.
- - Read this at SGinvestors.io -
- Downgrade Manulife US REIT to SELL. Target price: US$0.165.
Hammered by revaluation losses again.
- Manulife US REIT (SGX:BTOU) has announced that the valuation of its investment properties dropped 14.6% or US$280m due to a higher discount rate, higher cap rate and weakening occupancies. The discount rate used in its valuation increased by 50-125bp, while terminal cap rate increased by 25-100bp.
- - Read this at SGinvestors.io -
- According to management, this is not considered a breach of regulatory limit on aggregate leverage because it is caused by circumstances beyond its control. Management cautioned that office valuations remain under pressure and could continue to decline in 2023.
Breached financial covenants.
- Read more at SGinvestors.io.
