Sharechat Logo

Precinct Properties to raises $100 mln in 7-year bond to repay bank debt

Monday 13th November 2017

Text too small?

Precinct Properties New Zealand plans to raise up to $100 million from a seven-year bond offer to repay bank debt.

The listed commercial property investor announced its plans for the offer last Thursday and released details today. It is offering $75 million of the bonds with up to $25 million in oversubscriptions. 

The indicative margin is 150-to-160 basis points above the seven-year swap rate, subject to a minimum interest rate of 4.4 percent. The seven-year swap rate was recently at 2.96 percent, implying Precinct will pay annual interest between 4.46 percent-and-4.56 percent. The margin and interest rate will be set on Nov. 17 following the bookbuild and will be announced by Precinct via NZX shortly thereafter, it said. 

Precinct's indicative margin is lower than the 165-to-180 basis points range Property For Industry announced with a similar offer last month. The industrial property investor completed its offer last week, selling $100 million of seven-year bonds paying annual interest of 4.59 percent, a margin of 160 basis points over swaps. Meanwhile, Meridian Energy sold $150 million of seven-year bond in March with a coupon of 4.88 percent or 150 basis points above the swap rate. 

Precinct's offer opens today and closes on Nov. 17. The bonds are reserved for clients of ANZ Bank, First NZ Capital and Forsyth Barr as joint lead managers and Hobson Wealth Partners as co-manager, along with NZX participants and other "approved financial intermediaries", with no public pool. 

"We believe this option is well suited to Precinct’s current strategy and will further improve our capital structure post issue," chair Craig Stobo said to shareholders at last week's annual meeting. "Diversifying our funding sources remains a core component of Precinct’s capital management strategy. We will prudently consider future funding options which are well suited to Precinct’s strategy and further improve our capital structure."

Precinct increased annual profit 17 percent to $162.1 million in the latest financial year ended June 30. Stobo said the company's gearing was now at 18 percent, from 25.1 percent at the end of 2017, after the company raised $150 million selling four-year, fixed-rate subordinated convertible notes in September.

The shares rose 0.4 percent to $1.29, and have gained 7.1 percent this year.

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report