Buy Axis REIT shares?
Axis Real Estate Investment Trust (REIT) is expected to issue sukuk bonds worth RM300 million in the near-term to refinance its short-term debt, extend its debt expiry profile and lock in lower interest rate.
As at Sept 30, Axis REIT short-term debt stood at RM340 million, with RM198 million due this year.
However, it is likely REIT may draw down a portion first, given the revolving credit due to the maturity in 2011, and planned unit placement, HwangDBS Vickers Research said in a statement today.
"At 38.2 per cent gearing (Sept 30) based on total asset value, the company could still take on around RM151.1 million in debt before hitting the 50 per cent threshold.
"This is unlikely as impending capital management exercises should supplement its existing funding for asset acquisition purposes and bring it to a more comfortable low around 30 per cent level," it said.
The research firm maintained its "buy" call on the REIT and reduced the target price by 15 sen to RM2.75 from RM2.90.
Read the recomendation here: Axis Reit Analysis