Manulife US REIT - Annual Report 2021

ANNUAL REPORT 2021 27 Intended use of proceeds (US$ million) Actual use of proceeds (US$ million) Balance of proceeds (US$ million) To partially fund the acquisitions 93.5 94.7 (1.2) To pay the estimated fees and expenses in connection with the acquisitions and the private placement 6.5 5.3 1.2 Total 100.0 100.0 - Use of Proceeds On 9 December 2021, an aggregate of 154,084,000 new Units were issued at US$0.649 per Unit with gross proceeds of approximately US$100.0 million from the private placement announced. The use of proceeds raised from the private placement are set out in the table below. 1 MAS had on 16 April 2020 raised the leverage limit for REITs listed on the Singapore Exchange from 45.0% to 50.0% (up to 31 December 2021) and deferred to 1 January 2022 on the implementation of the requirement to have a minimum adjusted interest coverage ratio of 2.5 times before the leverage limit can be increased from the then prevailing 45.0% limit up to a maximum of 50.0%. 2 US$90.0 million of the Trust-level loan had been refinanced with a five-year term loan in January 2022. Debt Maturity Profile (US$ million) Exchange Plaza Phipps Secured Trust-level loans Unsecured Trust-level loans 2022 107.5 2 142.2 7.3 40.0 2023 105.0 2024 143.0 2025 180.0 2026 250.0 30.4 10.8 14.7 18.5 25.6 Expiry Profile (%) Debt Maturity Profile As at 31 December 2021, the total gross outstanding debt of MUST was US$975.0 million with an aggregate leverage of 42.8%, an increase from 41.0% as at 31 December 2020 mainly due to net fair value loss on investment properties. The higher leverage ratio is well within the internal target gearing limit of 45.0% and the regulatory limit of 50.0% 1 set by MAS and is not expected to have a material impact on MUST’s risk profile. The interest coverage ratio for the year ended 31 December 2021 was 3.4 times. MUST’s debt maturity profile remains well-staggered with a weighted average debt maturity of approximately 2.4 years as at 31 December 2021. To mitigate interest rate risk exposures, 86.5% of the gross borrowings has been hedged into fixed rates. The debt maturity profile was also well-staggered over five years with no more than 30.4% of debt maturing in any year. This minimises any refinancing risk in any one year and insulates MUST against short-term market liquidity crunches which may increase funding cost. MUST uses derivative financial instruments to hedge its interest rate risk exposure. The net fair value of the derivatives represents 0.1% of the net assets of MUST as at 31 December 2021. As actual fees and expenses utilised were less than the originally estimated fees and expenses, the remaining balance was used to partially fund the acquisitions of the properties. Save for the redeployment of such amounts as described above, the use of gross proceeds from the private placement was in accordance with the stated use and the percentage of gross proceeds as stated in the announcements.