Monday 12th March 2018
|Text too small?|
Investore Property will pay annual interest of at least 4.4 percent on its $100 million bond offer after setting its indicative margin ahead of next week's bookbuild, where the final price will be set.
The Auckland-based company said the margin will be 1.5-to-1.7 percent above the six-year swap rate, which is currently at 2.86 percent, with a minimum rate of 4.4 percent. That implies an upper limit of 4.56 percent on the six-year bonds. The final rate will be set after a bookbuild process on March 20. Investore's average interest rate on its debt was 4.47 percent as at Sept. 30.
The indicative margin compares to a 1.2-to-1.3 percent range set by larger rival Goodman Property Trust on a five-and-a-half year bond in February, a 1.45-to-1.55 percent range by Kiwi Property Group on a seven-year note, and a 1.5-to-1.6 percent range by Precinct Properties New Zealand on a seven-year bond.
Investore is offering up to $75 million of senior, secured, fixed-rate six-year bonds, and will accept oversubscriptions of up to $25 million, which it will use to repay bank debt in an effort to diversify its funding profile and extend the length of maturities.
Since Sept. 30, Investore has bought three Bunnings retail stores and a development site in Timaru, and sold two properties, drawing down $307.4 million of its $370 million banking facility. Including revaluation gains of $25.5 million, that gives it a loan-to-value ratio of 41.6 percent.
The real estate investor has to keep its loan-to-value ratio at or below 65 percent, an interest coverage ratio of at least 1.75 times earnings before interest and tax, and maintain a minimum weighted average lease term of six years. Its interest cover ratio is at 3.4 times and its WALT is 13.8 years.
The shares were unchanged at $1.39 and have dropped 6.7 percent so far this year, more than the 0.1 percent decline on the S&P/NZX 50 index over the same period.
No comments yet
MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap