Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223656
Title: INTEREST RATES AND THE FIXED-FLOATING DEBT STRUCTURE OF S-REITS
Authors: WANG MINYANG
Keywords: Real Estate
RE
Ong Seow Eng
2014/2015 RE
S-REITS
Interest Rates
Term Spread
Capital Structure
Interest Rate Swaps
Hedging
Issue Date: 4-Jun-2015
Citation: WANG MINYANG (2015-06-04). INTEREST RATES AND THE FIXED-FLOATING DEBT STRUCTURE OF S-REITS. ScholarBank@NUS Repository.
Abstract: With the increasing likelihood of an interest rates hike, most S-REITs are concerned with the rising cost of financing. One way to mitigate such interest rate risk is via adjusting their fixed-floating debt structure. This paper seeks to analyzing the determinants of a S-REIT’s choice between holding fixed or floating debt in the portfolio, and the relationship with interest rates changes. The study shows that firstly, higher levered, larger, more profitable, and better credit ratings are several REIT characteristics observed that increase the likelihood of taking up fixed-rate loans. Secondly, across 552 quarterly observations across 8 years, REITs in general will lower their percentage of fixed borrowings in their portfolio with the steepening of the yield curve. Further analysis shows that REITs with lower leverage has a higher correlation of percentage of debt hedged against the term spread. Lastly, the relationship between term spread and the use of interest rate swaps is examined and empirical evidence reveals a positive correlation between the two variables. On the other hand, no conclusions can be made between the maturity of interest rate swaps and the term spread. However, a change in debt maturity is likely to correspond to a similar change in swap maturities.
URI: https://scholarbank.nus.edu.sg/handle/10635/223656
Appears in Collections:Bachelor's Theses

Show full item record
Files in This Item:
File Description SizeFormatAccess SettingsVersion 
Wang Minyang 2014-2015.pdf2.37 MBAdobe PDF

RESTRICTED

NoneLog In

Page view(s)

14
checked on Sep 29, 2022

Download(s)

8
checked on Sep 29, 2022

Google ScholarTM

Check


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.