Centuria Raise A$300 million with Exchangeable Notes Offering17 February 2023
Centuria Industrial REIT has announced the launch of a fully underwritten A$300m guaranteed exchangeable notes offering, with net proceeds used to repay existing debt facilities and for general corporate purposes.
CIP Fund Manager and Centuria Head of Industrial, Jessie Curtis said, “The Notes build on CIP’s ongoing proactive capital management strategy and provide further diversity to its capital structure. Significantly, the issuance of these Notes reduces CIP’s average cost of debt through the repayment of more expensive debt facilities. CIP’s balance sheet metrics are also improved with weighted average hedge maturity increasing to 2.6 years and the proportion of hedged debt further increasing to c.100% for the remainder of FY23 and c.91% hedged at the commencement of FY24”.
Key features of the Notes include:
- a maturity date in March 2028 (5 years from settlement of the Notes);
- an investor put option, providing the holder with the option to redeem the Notes for 100% of the principal amount, in March 2026 (3 years from settlement of the Notes);
- a coupon of 3.45% to 3.95% per annum;
- an option for the holder to exchange the Notes into the units of CIP at the exchange price. The initial exchange price will be set at a premium of 25% above the Reference Price described below. Any Notes not exchanged before their maturity will be redeemed by CIP at 100% of their principal amount on the maturity date;
- unsubordinated and unsecured obligations of CIP, in line with CIP’s other existing debt; and
- an expected rating of Baa2 by Moody’s.
The final coupon is expected to be announced on 17 February 2023, following completion of the offer bookbuild.
Merrill Lynch Equities (Australia) Limited and Morgan Stanley & Co. International Plc are acting as Joint Global Coordinators, Bookrunners and Underwriters to the issue of the Notes (Joint Global Coordinators).
In conjunction with the issue of the Notes, the Joint Global Coordinators will conduct a delta placement to sell existing CIP units to facilitate hedging activity by investors in the Notes. The clearing price of the Delta Placement will determine the reference price for the Notes. The Joint Global Coordinators have underwritten the Reference Price at no less than A$3.33, representing a 4.0% discount to the A$3.47 closing price of CIP units on 16 February 2023. The size of the delta placement, and the Reference Price, will be determined following completion of the Delta Placement bookbuild.