Manulife US REIT's asset disposal deadline extended, dividends continue to be suspended until the end of 2026 | Lianhe Zaobao

Manulife US REIT previously obtained approval from lenders to extend the asset disposal deadline from the end of 2025 to June 30, 2026, and to extend the temporary financial covenant waiver period. The trust's management company announced on Wednesday (December 24) before the market opened that it has officially signed relevant documents with all lenders for the Master Restructuring Agreement concessions, which were approved by lenders on December 15. In addition to extending the disposal deadline to the end of June next year, the terms also include extending the waiver period for two temporary financial covenants. Firstly, the unencumbered leverage ratio limit has been raised from 60% to 80%, applicable from the end of 2025 to the end of June 2026; additionally, the minimum requirement for the Bank Interest Coverage Ratio has been lowered from 2 times to 1.5 times, applicable from the end of this year until December 31, 2026. Among these, the concession arrangement regarding the Bank Interest Coverage Ratio has been extended for an additional six months based on the extended disposal deadline. Further Reading Manulife US REIT proposes transformation plan to invest no more than $600 million in industrial, residential, and retail assets Manulife US REIT's occupancy rate fell to 68.2% in Q3, down 2.74% in early trading Therefore, lenders require Manulife US REIT to continue to comply with two existing conditions under the Master Restructuring Agreement: first, to maintain interest reserve requirements, and second, to continue suspending distributions to unitholders until the Reinstatement Conditions are met or the Bank Interest Coverage Ratio grace period expires, whichever is later In other words, Manulife US REIT may stop paying dividends until the end of 2026. The trust's stock price fell after the market opened on Wednesday, reporting USD 0.071 (approximately SGD 0.091) at 10:25 AM, down 1.39%. The trust stated in a statement that further grace arrangements regarding bank interest coverage are crucial for the trust: "If this arrangement is not obtained, the trust will be unable to meet the requirement of maintaining a bank interest coverage ratio of no less than 2 times after the temporary relaxation measures expire on January 1, 2026." The trust announced in early 2024 that it expects continued borrowing to exceed the regulatory limit, thus announcing a capital restructuring and suspending dividends for two years to raise funds. Since then, the trust has been continuously selling off assets to repay debts and announced on December 1 that it is seeking holder approval for a transformation plan called Growth and Value Up Plan to reverse its original asset strategy focused on traditional US office buildings