ESR IR 2021 - EN

20 STEP FORWARD Management Discussion and Analysis The Group monitors its debt maturity profile regularly. It also ensures sufficient cash reserves are maintained and disciplined in refinancing existing borrowings to meet the Group’s short-term obligations, ongoing developments, and investment opportunities. As at 30 June 2021, the Group’s weighted average debt maturity is approximately 4 years. Beyond five years In the third and fifth year, inclusive In the second year Within one year 495 1,676 189 1,393 45% 13% 37% 5% Debt Maturity Profile (US$ million) As at 30 June 2021 The Group has exposures to foreign exchange rate fluctuations from subsidiaries, associates and joint ventures from China, Japan, South Korea, Australia, Singapore and India. The Group manages its foreign currency exposures via natural hedges at both projects and corporate levels. Operating and development activities of each countries are funded through project level debts and operating income that are in their respective local currencies. At corporate level, the Group currently fund some of its investments through corporate borrowings in the currency of the country in which the investment is located. The Group has not used foreign currency derivatives to hedge its underlying net investments. CAPITAL MANAGEMENT ESR adopts a proactive and disciplined capital management approach, and regularly review its debt maturity profile and liquidity position. The Group maintains a well-capitalised balance sheet, and actively diversifies its funding sources through a combination of facilities with both local and international banks, and capital market issuances in optimising its costs of debt. The Group’s total borrowings as at 30 June 2021 were US$3.8 billion. With a cash balance of US$1.1 billion, the net debt to total assets as at 30 June 2021 was 30.6% which was within an acceptable and healthy range, and is expected to ease following the completion of the ARA acquisition. During 1H2021, the Group continues to expand and diversify its funding and capital structure, which is crucial for fuelling the Group’s long-term growth. In April 2021, it entered into a US$400 million (with a US$100 million incremental option) unsecured term loan facility which consists of a three-year tranche of US$267 million at Libor plus 2.75% and a five-year tranche of US$133 million at Libor plus 3.25%. There were 10 banks participating in the new facility which included both international and Asian financial institutions. In March 2021, ESR issued S$200 million (approximately US$148.6 million) NC5 fixed rate perpetual resettable step-up subordinated securities at a distribution rate of 5.65% (“ Perpetual Securities NC5 5.65% ”) under its US$2.0 billion Multicurrency Debt Issuance Programme. In June 2021, ESR issued a further tranche within the Perpetual Securities NC5 5.65% amounting to S$150 million (approximately US$111.6 million), bringing the aggregate total amount to S$350 million (approximately US$260.2 million). The Group manages its interest rates exposure by maintaining a combination of fixed and floating rate borrowings. As at 30 June 2021, 34% of the Group’s borrowings was on fixed rate while the remaining 66% was on floating rate basis. In managing the interest rate profile, the Group considers interest rate outlook and holding periods of its investment profile. The Group’s weighted average interest rate was 4.6% as of 30 June 2021.