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

Published: Mon 13 Nov 2017 01:38 PM
Precinct Properties to raises $100 mln in 7-year bond to repay bank debt
By Sophie Boot
Nov. 13 (BusinessDesk) - 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.

Next in Business, Science, and Tech

Bank Complaints On The Rise, Consumer NZ’s Survey Shows
By: Consumer NZ
Feds Applauds UK-Australia Free Trade Deal
By: Federated Farmers
REINZ May Data: House Price Rises Continue; Auckland Hits New Record Median Price Again
GDP Climbs 1.6 Percent In March 2021 Quarter Following December Dip
By: Statistics New Zealand
Debt Serviceability Restrictions Added To Policy Toolkit
By: Reserve Bank
1.4 Million In Rare Vintage Watches, Gems, Jewels & Diamonds Go Under The Hammer At Webb’s Auction On Sunday
By: Webb's
View as: DESKTOP | MOBILE © Scoop Media