Precinct Properties NZ Ltd has borrowed $US110 million ($NZ162.8 million) for 10- & 12-year terms through a US private placement (USPP) issue.
The NZX-listed commercial property investor, which is developing Commercial Bay at the foot of Auckland’s central business district, will use the proceeds to repay bank debt. The 2 issues will increase Precinct’s weighted average debt maturity profile from 3.4 years to 4.7 years. The weighted average term remaining on secured drawn debt also extends significantly, from 3.6 years to 6.7 years.
The private placement issue is in 2 tranches, a $US80 million 10-year note with a coupon of 4.28% and a $US30 million 12- year note with a coupon of 4.38%. To remove all currency risk, Precinct has fully swapped the proceeds back to $NZ.
Chief financial officer Richard Hilder said when the deal was done on Thursday: “This is the second successful USPP issue Precinct has undertaken since late 2014. This transaction demonstrates the strong demand from US investors and further reinforces investor confidence in the quality of our business.
“Consistent with our proactive approach to capital management, long -erm funding via the USPP market has been secured at very competitive pricing levels. The USPP issuance continues to add valuable funding diversity to Precinct’s borrowings, increasing the weighting of non-bank funding while also improving tenor.”
Attribution: Company release.