THE Babcock & Brown Japan Property Trust yesterday confirmed it is within bank covenants and has no debt maturing prior to March 2010.
The debt maturing in FY2010 amounts to ¥18.6 billion, representing approximately 20% of total borrowings and currently has a loan to value ratio of approximately 37%.
BJT said the debt is non-recourse and is secured solely by 10 of the 44 assets but there is no cross-collateralization with any other assets in which BJT has an interest.
BJT’s debt consists entirely of 6 separate, asset-specific loans structured in this way and borrowed in
The trust said whilst the recent significant fluctuations in the AUD/JPY exchange rate have impacted the mark to market value of BJT’s foreign exchange hedges, none of its debt facilities contain covenants which take into account foreign exchange hedging MTM.
The only covenants BJT has which are impacted by the MTM of the foreign exchange hedges are included in its capital and distribution hedging contracts. These covenants are contained in one such hedging contract itself, under which BJT has an aggregate of ¥11.6 billion (A$113.9 million) in capital and ¥6.8 billion (A$99.7 million) in distributions hedged.
However, more than offsetting the MTM negative value of BJT’s capital hedge contracts is the substantial increase in the AUD-denominated net tangible asset backing of BJT resulting from the appreciation of the Yen, because approximately 80% of BJT’s Yen-denominated net assets are unhedged.
NTA has therefore increased by approximately A$286.6 million as at 28 November 2008 since 30 June 2008, and during this time NTA per unit (unaudited) has increased to approximately $1.96 per unit from $1.39.
Australian Property Journal
