ABS: Banks Are Ready to Support Landlords Affected by Rent Relief Measures
by Company Announcement June 4, 2020In a statement issued by the Association of Banks Singapore, the association reiterated that banks in Singapore are ready to support landlords who are facing income constrains and cashflow issues from the rental relief measures under the proposed COVID-19 (Temporary Measures) (Amendment) Bill.
The association said that landlords facing cash flow difficulties can already apply to banks to defer principal payments on their mortgages up to 31 December 2020 and to extend the loan tenure by up to the corresponding deferment period if they wish. In addition, individual landlords who are required to provide relief to their tenants under the proposed Bill can also apply to defer interest payments on their mortgages up to 31 December 2020.
Individual landlords who need to access additional credit to meet their immediate cashflow needs can apply for mortgage equity withdrawal loans, while SME landlords can apply for loans under Enterprise Singapore’s Temporary Bridging Loan Programme or Working Capital Loan Scheme.
Corporate landlords, including real estate investment trusts listed on the Singapore Exchange, could similarly face constraints in their operating income and cash flows, which may in turn affect their ability to meet financial covenants in bank loan agreements.
The Association of Banks in Singapore (ABS) assures affected landlords that banks will work closely to address any loan covenants breaches (e.g. debt service covenant and interest service covenant) as a result of the temporary constraints imposed by the proposed Bill. This includes waiving the breach and/or revising the loan covenants to take account of the current circumstances.
They said that banks will continue to work with all landlord borrowers bilaterally to explore funding and refinancing solutions to help ease their financial strain.
Ong-Ang Ai Boon
Mrs Ong-Ang Ai Boon, Director, ABS, said,
“The additional relief measures demonstrate banks’ support for individual landlords who face temporary cash flow constraints as they accommodate their tenants with rental relief.”
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