Abacus Restructures Debt and Finalises Conversion of 2 troublesome Loans
1 June 2022Abacus Property Group has extended its interest rate hedging and debt maturity profiles and finalised the conversion of two troubled sites.
Abacus has negotiated and agreed terms to increase and extend $2.0 billion of syndicated and bilateral
banking facilities with improved pricing. Following this extension, Abacus will have a weighted average
debt maturity of over 4.5 years, with no debt expiring in FY23, and the majority expiring from FY26
onwards. Abacus remains covenant compliant with adequate headroom on all covenants with current
Group gearing at circa 30%.
The Group has also increased interest rate hedging and is now 76% and 50% hedged in FY23 and FY24
respectively, based on current drawn debt. The weighted average fixed rate is forecast to be 0.6% and
0.9% in FY23 and FY24 respectively.
In addition, Abacus has also settled the acquisition of the previously announced 100% freehold interest in
the remaining land at 56 Prescot Parade, Milperra NSW (“Riverlands”) and 181 James Ruse Drive, Camellia
NSW (“Camellia”), converting Abacus’ interest from lender to owner.
Abacus partnered with, Demian Developments in both the Miplerra and Camellia sites. The 82ha Riverlands Golf Course at Milperra was planned to be redeveloped for housing and with much of the land subject to flooding only 15ha was capable of being developed. In 2019, the Group sold off the 18ha of the rezoned land to Mirvac for $37m, leaving the balance of the land with little value.
The Camellia site is a prime 6.8ha parcel of land adjoining the Parramatta River and James Ruse Drive. The site is heavily contaminated but is ultimately well suited to a large scale residential development. Demian Developments prepared a master plan for the site incorporating 2,400 apartments and 14,000sqm of retail space, however in early 2021, the Department of Planning deferred a decision on the planning for the site until a new Strategy for Rosehill and Camellia could be developed. The site was put up for sale in May 2021, however interest in the site was mostly conditional upon a rezoning.
Abacus paid $100 million, excluding transaction costs, for both sites which equates to the carrying value of the outstanding loans previously held against the parcels of land.
Abacus reaffirms its distribution guidance of at least 18.0 cents per stapled security for FY22, reflecting a
payout ratio in the range of 85-95% of FFO.