Charter Hall has announced a new debt funding deal which nearly doubles its borrowings to provide greater capacity to expand the business.
In the 2021 half yearly report, Charter Hall recorded $320m of borrowings as at 31st December, down from $364m in June 2020, and has today announced a further issuance of $250m of 10 year bonds.
The new 10 year Notes are expected to settle on 21 April 2021 and were issued with fixed price of 3.1% but swapped back to a floating exposure, which provides an all up cost of debt of 1.5% per annum above BBSW.
In 2018, Charter Hall under took a similar issuance of 10 year bonds which were priced at 2.05% over BBSW.
Russell Proutt, Group CFO stated that “This bond issuance is consistent with our strategy to increase liquidity, extend our weighted average debt maturity, which is now 6.9 years, and diversify our sources of debt capital. We are pleased that the transaction was strongly supported by domestic and international investors with this representing the fourth successful Australian dollar medium term note issuance across the broader Charter Hall funds management platform this financial year.”
“This issue increases the volume of debt capital market issuance beyond $4 billion across the Platform’s $19billion of debt facilities, of which $13 billion net of cash is drawn, providing significant liquidity and investment capacity across the Platform including the balance sheet of CHC”.
David Harrison, Group Managing Director and CEO further noted “We are pleased to expand our Investment Capacity at a time where we see attractive risk adjusted returns investing in the growth of our funds and partnerships. In particular, we wish to continue investing in our Direct platform of funds which boast average WALE’s of 9 years across the suite of industrial, office and diversified fund portfolios.”
“Our wholesale partnerships continue to grow and we expect further investment by the Group to accelerate the growth of existing partnerships and new capital partnerships with both domestic and offshore wholesale investors. Further deployment of co investment capital is expected to drive growth in the Property Investment earnings segment of CHC, which is expected to also drive Property Funds Management earnings segments”.
Further Information
Charter Hall recently issued an update on its $7bn development pipeline which is heavily focus on the Office & Industrial sectors. See attachment below.
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