Growthpoint Secured Long Term Debt Finance Of ~AUD161 Mn Via The USPP Market

  • Feb 28, 2019 AEDT
  • Team Kalkine
Growthpoint Secured Long Term Debt Finance Of ~AUD161 Mn Via The USPP Market

Growthpoint Properties Australia (ASX: GOZ) is an ASX listed A-REIT (Real Estate Investment Trust) which is having a diversified portfolio of 59 office and industrial properties throughout Australia. On 28 February 2019, the company announced that it has successfully secured long term debt finance of around A$161 Mn through a US Private Placement (USPP) market.

As per the company’s announcement, the USPP issue was over four times oversubscribed from its original size of US$100 Mn. It achieved favourable pricing which allowed the company to increase its offer size to US$115 Mn.

The issue will comprise one tranche of USD denominated notes with a tenor of 10-years which will mature on 23 May 2029. The notes have been swapped back to a margin of 2.22% per annum over the 90-day bank bill swap rate.

After the issue of these notes, the company is expecting its weighted average cost of debt to be around 4.3% per annum, including line fees on an undrawn debt of $255 Mn. Assuming debt facilities are fully drawn, the weighted average cost of debt would be 4.1% per annum.

According to the company’s Chief Financial Officer (CFO), Mr. Dion Andrews, this successful issuance is a strong endorsement of Growthpoint’s credit strength, capital management program and high-quality property portfolio. He further informed that after the completion of this transaction, the company will have a weighted average debt duration of 5.11 years, 79.3% of debt fixed and a weighted average fixed debt term of 5.01 years.

The issue is expected to settle in May 2019, with the proceeds used to repay an AUD150 million bridge facility entered to fund the acquisition of 100 Skyring Terrace, Newstead, QLD.

The company recently released its half-year results in which reported it Statutory profit of $188.8 million which was 8.9% less than the previous corresponding period.

For the half-year period, the company reported Funds from operation (FFO) of $12.5 cents per share which was in line with the FFO reported in the previous corresponding period (pcp). The company has reported distribution per security of 11.4 cents per share which was 3.6% higher than pcp.

The company completed various important transactions in the half year which includes the acquisition of 100 Skyring Terrace which is located in Newstead, Queensland. The company acquired it for a total amount of $250 million which was funded in part by a $135 million Rights Offer which achieved substantial support from new and existing Securityholders. In October 2018, the company settled the acquisition of 836 Wellington Street which is located in West Perth, Western Australia (WA).

GOZ’s stock last traded at a price of $4.050, down by 0.491% during the day’s trade with a market capitalisation of ~$2.96 billion. The counter opened the day at $4.120 touched a day’s low of $4.025 with a daily volume of ~691,663. The stock has provided a Year Till Date return of 9.70% & also posted returns of 10.24%, 10.90% & 5.99% over the past six months, three & one-months period respectively. It had a 52-week high price of $4.180 and touched 52 weeks low of $3.183.


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