SINGAPORE (Sept 18): Cromwell European Real Estate Investment Trust (CEREIT) today launched an initial public offering of up to 927 million euros ($1.5 billion) in Singapore.

The REIT is sponsored by Australia’s Cromwell Property Group, an ASX-listed real estate manager which was lately reported to be facing a potential downgrade from Moody’s Investor Service for its high level of debt relative to earnings.  

Cromwell Property Group also recently entered into new short-term loan facilities to fund its stake in CEREIT.

See: Property giant Cromwell faces credit rating downgrade from Moody’s

Citing the term sheet of the deal, International Financing Review (IFR) has indicated that the base offering for CEREIT consists of up to 1.296 billion units in an indicative range of 55-57 euro cents, which is equivalent to a forecast dividend yield of up to 7.7% a year for FY18.

In an update published Monday, the Thomson Reuters publication highlights that the REIT intends to sell up to 334.8 million units to two cornerstone investors, as mentioned in the terms.

The term sheet also showed that a private investment firm owned by Chinese-Filipino billionaire Andrew Tan, Hillsboro Capital, as well as US buyout fund Cerberus Capital Management LP, have agreed to buy 100 million euros and 88 million euros worth of units, respectively, says IFR.