Aegis Value REITs Obtains Credit Rating 'A-'... "Public Bond Issuance Possible"

Aegis Asset Management's flagship listed REIT, Aegis Value Plus REIT (hereinafter Aegis Value REIT), is enhancing its funding competitiveness by securing a credit rating.

On the 21st, Aegis Asset Management announced that Aegis Value REIT received a credit rating of ‘A- (Stable)’ from both Korea Ratings and Korea Investors Service.

Aegis Value REIT is Aegis Asset Management's first public offering and listed REIT, which was listed in July 2020. Its representative underlying assets include prime-grade offices in Seoul's Central Business District (CBD), such as the Taepyeongno Building and Twin Tree Tower.

The A- (Stable) rating indicates a high overall debt repayment ability, and considering the financial structure such as asset composition, debt ratio, and cash flow, the credit rating is expected to remain stable in the future.

Korea Ratings positively evaluated Aegis Value REIT for ▲very excellent cash flow stability and asset portfolio ▲very strong coverage indicators (EBITDA·fixed costs). Korea Investors Service based its evaluation on ▲very excellent value of held assets ▲excellent stability of cash flow through operating assets.

With this credit rating secured, Aegis Value REIT can now issue public bonds. To issue public bonds, a credit rating must be obtained from at least two credit rating agencies. Listed REITs that can issue public bonds have the advantage of diversifying their funding strategies beyond financial institution borrowings.

Furthermore, obtaining a credit rating also serves as official recognition of the REIT's financial stability. Credit rating agencies assign ratings by considering cash flow and financial status that reflect the debt repayment ability of the rated entity. A higher credit rating means a higher likelihood of debt repayment, enabling loans at more favorable interest rates.

Aegis Value REIT is restructuring its borrowing structure by utilizing various funding methods. Last month, it raised 62.8 billion KRW through a rights offering to shareholders. Using these funds, it repaid 60 billion KRW of the 176 billion KRW bridge loan taken for the purchase of Twin Tree Tower. With the newly secured credit rating, there is now an option to refinance the remaining loan through public bond issuance depending on interest rate trends.

An Aegis Asset Management official said, “Aegis Value REIT is the only listed REIT in Korea that has executed both third-party allotment and rights offerings since its listing. We will enhance the REIT’s growth potential and stability through various funding methods, including public bond issuance, to repay the support of our investors.”