Vicinity Centres announced that it has priced $400 million of six-year Australian dollar medium term notes, comprising $225 million of fixed rate notes and $175 million of floating rate notes.
Proceeds of the issue will be used to repay existing bank facilities and for general corporate purposes. The fixed rate notes were priced at a coupon of 2.60% and the floating rate notes were priced at a coupon of 3-month bank bill swap rate plus 142 basis points.
In their FY19 Half Yearly report, Vicinity indicated just $38M of existing notes were due in FY19 with a $725M of notes and bank debt due in FY2020. At the time the weighted average cost of debt was 4.5%.
The new notes will assist to reduce the average cost and extend the average term. Subject to satisfaction of customary conditions precedent, settlement of the issue of the senior and unsecured Notes is expected to occur on 27 June 2019.
Mr Grant Kelley, Chief Executive Officer and Managing Director, said: “We are very pleased with the strong response that we received for this raising from both new and existing domestic and Asian bond investors which has resulted in highly competitive pricing for our Notes and extends the average duration of our financing facilities.”