AMP Office Trust's new notes issued at 8.5%

Tuesday 1st June 2004

AMP NZ Office Trust has confirmed that investors in its mandatory convertible rights issue will receive a minimum annual interest rate of 8.5%.

The final interest rate will be the greater of 8.5%, or the three-year swap rate plus a margin of 2.00% (to be notified to NZX on 13 July 2004).

Existing Unitholders will be offered two MCNs for every nine Units held at a price of $1.00 each, with rights of renunciation.

New investors will be able to purchase rights where existing unitholders elect to renounce their rights.

The offer is expected to raise about $95.2 million in new capital for ANZO, New Zealand's largest prime office property portfolio.

The money will be used to partly fund the acquisitions of the Mobil on the Park Building and State Insurance Tower in Wellington.

"The interest rate on the MCNs makes them a strong value proposition," ANZO's executive manager Rob Lang says. "Because the interest rate is fixed until the MCNs convert, the investment will provide consistent cashflow returns for investors."

"Investors will benefit from any capital appreciation of the Units above 92 cents per unit by the conversion date, as the MCNs convert on a dollar-for-dollar basis at the lower of the market price (less 2%) of the units prior to conversion or a unit price of 92 cents. After conversion, MCN holders can choose to retain their investment in units, or to sell those Units."

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