Capital Management
A PRUDENT CAPITAL MANAGEMENT STRATEGY
The Manager pursues a prudent capital management
strategy through adopting and maintaining a conservative
gearing level as well as an active currency and interest rate
management policy.
This strategy aims to:
s /PTIMIZE 5NITHOLDER S RETURNS
s 0ROVIDE STABLE RETURNS TO 5NITHOLDERS
s -INIMIZE RElNANCING RISKS
s -AINTAIN mEXIBILITY FOR WORKING CAPITAL REQUIREMENTS AND
s 2ETAIN mEXIBILITY IN THE FUNDING OF FUTURE ACQUISITIONS
HEDGING AGAINST INTEREST RATE RISKS
It is the policy of the Manager to work towards delivering
stable and growing returns through sourcing attractively
priced capital and adopting appropriate hedging strategies.
LMIR Trust has in place interest rate swap contracts for a
period of 3.75 years commencing March 2015 on a notional
principal amount of SGD155.0 million to hedge against the
floating interest rate of the borrowings.
HEDGING AGAINST FOREIGN EXCHANGE RISKS
,-)2 4RUST HAS ENTERED INTO FOREIGN EXCHANGE HEDGES TO
hedge its estimated quarterly cash flows in Indonesian
2UPIAH UNTIL THE END OF
4HE FOREIGN EXCHANGE HEDGES
are entered into so as to provide a degree of certainty that
CHANGES IN THE EXCHANGE RATE BETWEEN THE )NDONESIAN
Rupiah and the Singapore Dollars will not have a significant
negative impact on the distributions in Singapore Dollars to
5NITHOLDERS
MODERATE GEARING LEVEL PROVIDES STABILITY IN
CURRENT TIGHT CREDIT MARKET
5NDER THE 0ROPERTY &UND 'UIDELINES A 2%)4 IS PERMITTED TO
borrow up to 35.0% of the value of its Deposited Property
OR UP TO A MAXIMUM OF
IF A CREDIT RATING IS OBTAINED
and disclosed to the public).
In June 2012, LMIR Trust established a SGD750,000,000
Guaranteed Euro Medium Term Note Programme
(EMTN Programme) and the following notes had been
issued pursuant thereto as illustrated below:
Amount
Coupon
Maturity Date
4.88%
6 July 2015
4.25% 4 October 2016
5.875%
6 July 2017
4.48% 28 November 2017
In December 2014, LMIR Trust drew down a
3'$ MILLION YEAR LOAN TO PART lNANCE THE ACQUISITION
OF ,IPPO -ALL +EMANG
As at 31 December 2014, LMIR Trust’s gearing ratio stood
AT
WHICH IS BELOW THE ALLOWED AGGREGATE LEVERAGE
limit of 35%.
LMIR Trust has continued to perform in accordance with
the loan provision and have met all covenants to date.
We will continue to focus on prudent capital management
strategy by conserving cash through tight controls over
OPERATING AND CAPITAL EXPENDITURE
"ASED ON TOTAL DEPOSITED ASSETS AS AT
$ECEMBER
32
LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
