I have talked about a possible rights issuance for REITs in my last article here. However, with the recent new measures rolled out by the Ministry of Finance (MOF) and Inland Revenue Authority of Singapore (IRAS), a lifeline has been thrown to REITs in general.
MOF and IRAS will extend the timeline for REITs to distribute at least 90% of their taxable income from 3 months to 12 months (after the end of FY2020) to qualify for tax transparency, allowing for more flexibility in managing their cashflows. MAS will raise the leverage limit for REITs from 45% to 50% with immediate effect, allowing for flexibility in managing their capital structure. MAS will defer the implementation of a new minimum interest coverage ratio (ICR) requirement to Jan 1, 2022. In a public consultation last year, it had proposed to require REITs to have a minimum ICR of 2.5x before they are