The manager of Manulife US Real Estate Investment Trust (Manulife US Reit) declared no distribution for the first half ended Jun 30, as the Reit has breached banks’ unencumbered gearing ratio, causing all its loans to be reclassified as current liabilities.

The financial covenant in Manulife US Reit’s loan agreements provides that the ratio of consolidated total unencumbered debt to consolidated total unencumbered assets shall be not more than 60 per cent.