First REIT launches consent solicitation for 2027 bonds

• First REIT seeks bondholder consent to change some terms of its 2027 SGD bonds. This is part of their strategic pivot away from Indonesia.
• Bondholders are asked to approve an early call option and divestment-related waivers.
• We recommend acceptance, given the fair terms and early consent fee.
• CGIF guarantee, short maturity, and expected redemption help mitigate bondholder risks.
• Bondholders should let iFAST (or their advisors) know of their voting decision. We recommend voting for this consent solicitation by 13 July, to benefit from the early consent fee.

First REIT has launched a consent solicitation for its 2027 SGD bonds (FIRTSP 3.250% 07Apr2027 Corp (SGD)). These bonds are 100% guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank. The bonds were rated AA by S&P on issuance in 2022; in line with CGIF’s current S&P rating of AA.

Why this consent solicitation?

(Unless otherwise stated, dollar amounts [$] are in Singapore Dollars.)

First REIT is seeking bondholder consent as part of its broader plan to exit Indonesia and reposition its portfolio toward developed-market healthcare assets.

On 1 April 2026, First REIT announced the proposed divestments of selected Indonesia assets for $471.5m, comprising eight hospital assets to Siloam and three non-core assets to PT Lippo Karawaci Tbk and PT Metropolis Propertindo Utama (MPU). Separately, First REIT has obtained a put option granted by Siloam, to sell its remaining six Indonesia hospital assets, with additional potential purchase consideration of around $294.8m.

The strategic rationale is to reduce First REIT’s exposure to Indonesia. Historically, SGD/IDR currency movements contributed to significant volatility in reported returns and distributions, since First REIT is listed on SGX and reports in SGD. The divestments also allow First REIT to recycle capital into developed-market healthcare assets.

Importantly for bondholders, First REIT intends to use a significant portion of the proceeds ($362.7m) to repay various loans and bonds, including these 2027 CGIF-guaranteed bonds. The consent solicitation is a transaction-enabling step, allowing the divestments to proceed without triggering any technical breaches, while also allowing First REIT to redeem the bonds early after the divestments are completed.

Two things bondholders are being asked to approve

First REIT is asking bondholders to approve two main changes: (i) allowing First REIT to redeem the bonds early through adding a call option; and (ii) waiving certain divestment-related non-compliance or default technical breaches that may arise from the divestments.

1. New issuer call option

First REIT currently does not have a right to call these bonds early. It is therefore asking bondholders to amend the bond terms, so that it can call / redeem bonds before the April 2027 maturity.

(Note: If First REIT opts to call these bonds, it must do so on all the outstanding bonds, and may not partially call just some of these outstanding bonds.)

If the call option is exercised, bondholders will receive a Make-Whole Amount plus accrued interest (not a plain par redemption). The Make-Whole Amount is calculated as the greater of: (i) the present value of the remaining principal and scheduled coupons to maturity, discounted at the relevant SORA OIS plus 0.15%; and (ii) 100% of principal. In simple terms, this Make-Whole Amount is meant to compensate bondholders for early redemption, by accounting for the principal and remaining coupons they would otherwise have received up to maturity.

We find this proposed amendment reasonable. The make-whole formula is fairly standard across many bonds. Bondholders are being paid an amount designed to approximate the present value of holding the bond to maturity, based on the agreed make-whole discount rate, and are not being asked to accept a haircut. The early consent fee further improves the economics for bondholders who vote in favour of this.

2. Waiver of divestment-related non-compliance and defaults

First REIT is also asking bondholders to waive certain technical breaches (e.g. non-compliance, defaults, events of default, and covenant breaches) that may arise from the proposed divestments.

This is necessary because some of the assets sold are connected to existing borrowings. For instance, some non-core properties are subject to mortgages granted in connection with the CGIF bonds and loan facilities. Selling these assets may therefore require creditor consent, or other steps that could technically breach the existing bond documents – this is what First REIT is now seeking.

We find this proposed amendment reasonable. It appears targeted at divestment-related technical breaches, rather than giving First REIT a general waiver against bondholders. Risks are also mitigated by the CGIF guarantee which appears to remain intact. The short remaining maturity of the bonds and First REIT’s stated intention to redeem the bonds after completion of the proposed divestments also help reduce risk.

Our recommendation: Accept the consent solicitation

We recommend bondholders accept the consent solicitation exercise. Broadly, the exercise is intended to help the proposed divestments proceed, with a significant portion of the proceeds earmarked for repayment of the CGIF bonds and other debt. In other words, the transaction is ultimately intended to support repayment of these bonds, rather than impose a haircut on bondholders.

1. The two proposed amendments look reasonable, as explained above.
2. Bondholders can receive an early consent fee of up to 0.50% of principal, if they vote in favour of this by 13 July.
3. Credit risk remains relatively mitigated by the CGIF guarantee, which is expected to remain intact.
4. Maturity risk is limited by the short remaining tenor. The bond matures in April 2027, so even if the divestments are delayed, bondholders are not exposed to a long-dated credit risk. If the proposed divestments complete as planned, First REIT will call the bonds within 60 days after completion.
5. The final reason is tactical. We expect the resolution to pass given the fair terms. If it passes, dissenting or non-voting bondholders will still be bound by the outcome, but will not receive a consent fee.

Key timelines to note (important!)

First REIT launched the consent solicitation on 29 June 2026.

Our recommendation is to accept the consent solicitation early. Bondholders who wish to qualify for the early consent fee should indicate this to iFAST (or their advisors) by 13 July 2026. The early consent fee is 0.50% of principal, or $1,250 per $250,000 holding.

The final deadline to submit voting instructions to iFAST (or their advisors) is 16 July 2026. Bondholders who vote in favour after the early consent deadline, but before this final deadline, may receive a smaller consent fee of 0.25% of principal, or $625 per $250,000 holding. Nonetheless, our primary recommendation is still to accept this early rather than wait for the final deadline.

Bondholders should note that bonds submitted for voting may be earmarked, and may not be traded or transferred during the earmarking period. In any case, First REIT expects the proposed divestments to be completed in August 2026. If this happens as scheduled, we expect First REIT to call these bonds in late 2026 (around November – December).

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds positions in FIRTSP 3.250% 07Apr2027 Corp (SGD). The analyst who produced this report holds NIL positions in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.