MEXICO CITY, Nov 4 (Reuters) - Mexican real estate investment trust (REIT) Fibra Uno hopes to take advantage of record-low interest rates and issue 25 billion pesos ($1.93 billion) in short-term paper to refinance its debt and buy new properties, the company said on Monday.
Known locally as fibras, Mexico’s REITs issue certificates that function much like shares on the stock exchange, and allow investors to participate in the country’s property market without owning buildings.
Fibra Uno first listed on the Mexican stock exchange in 2011, but has since placed two follow-on offerings for a total of 34.5 billion pesos, according to its prospectus.
The company now wants to raise 25 billion pesos in short-term paper, Director of Investor Relations Jorge Pigeon said.
“The idea is to use between 8 to 10 billion pesos for new acquisitions, and to spend the rest we raise on refinancing debt,” Pigeon said. “Interest rates are very low at the moment so it makes sense to make the most of them.”
The Banco de Mexico last month lowered its benchmark interest rate by 25 basis points to 3.50 percent, its lowest-ever level.
Pigeon said much of the debt the company had taken on was the result of debt assumed when it bought new properties. With the new purchases the company hopes to make, total debt would stand at about 35 percent of its total assets, he added.
Fibra Uno shareholders will vote on the plan, which still needs to be approved by Mexican regulators, on Tuesday.