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ING Property interest cover to be lowered temporarily

Tuesday 5th August 2008

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ING Property Trust, New Zealand's fourth biggest listed property investor by value of assets, has reduced the interest cover requirement under its banking facilities with ANZ National Bank.

The minimum interest cover requirement was lowered to 2 from 2.5, giving the trust "better flexibility to utilize its existing facility," it said in a statement today. The minimum cover will increase to 2.25 times on May 31, 2009, it said.

Under ING Property's banking agreement, it can borrow up to 45% of the value of its assets and the trust is currently 40% geared, giving it little room to increase borrowing. ING Property's units have dropped 31% in the past 12 months, outpacing the NZX 50 Index's 20% slide.

The move "is not a big red flag," said Jeremy Nicholl, ING NZ's managing director for real estate. "There's still plenty of interest cover."

ANZ National confirmed it is continuing its relationship with the trust, with the current $600 million facility operating to September 2010, the trust said

The term and size of the facility and the maximum loan to value ratio of 45% remain unchanged, it said.

By Jonathan Underhill

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