Previously I’ve blog about Which Singapore REIT had the Most Frequent Equity Fundraising? Besides EFR, there is another way to raise funds without increasing gearing, which is through perpetual securities. Perpetual securities are also known as perps, perpetual bonds or perpetual notes and the interest rate is higher. In fact, with perps, the existing gearing could even be reduced.
For perps, there is no maturity date, therefore perps are treated as equity instead of debt. The coupon payment (interest or dividend in other terms) could be stopped/deferred at any time without the holders’ consent. Though there might be a call schedule, it is up to the issuer’s decision whether to redeem it or not. If you would like to read for more detail about perpetual securities, check out the following: