Centuria Capital No.2 Fund (under terms and conditions set out in the information memorandum) today announced a new issue, Centuria Notes with a fixed and floating tranche.
The offer will raise a minimum of $50 million with the ability to take oversubscriptions. The proceeds will be used for general corporate purposes including refinancing of the vendor note used to fund Centuria’s acquisition of the majority of 360 Capital Group’s (ASX: TGP) real estate management platform. The potential oversubscriptions will be used to purchase assets which will form part of the security pool. These securities are sold to wholesale investors only (no prospectus being issued) and are not listed on the Australian Securities Exchange.
These securities are structured as direct, senior secured obligations of the issuer which holds the group’s equity stakes in three listed property funds and four other unlisted property funds. Investors benefit from a guarantee by the parent company, Centuria Capital Limited (ASX: CNI), on a senior unsecured basis. Interest payments are non-discretionary, fixed (or floating) rate and paid semi-annual (or quarterly) in arrears.
The interest margin is guided to be set at [4.50%] p.a. above the 90-Day BBSW for floating rate tranche and 7.00% for the fixed tranche. Investors are protected by event of default mechanisms (including cross default) and a negative pledge where secured debt cannot exceed 65% of total tangible assets. The guarantor (CNI) is subject to a minimum interest cover ratio of 2.00x when CNI wishes to incur new debt .
The issuer has the right but not the obligation to redeem the notes prior to maturity on the nominated optional redemption dates (21 April 2019 ($102) and 21 April 2020 ($101)) or if a Tax or Accounting Event occurs. The holder may request early redemption of the notes on the occurrence of a Change of Control Event. Legal final maturity date of the notes is 21 April 2021.
Summary of the Transaction:
Fixed Rate Notes
|
Product Type |
Corporate Bonds |
Last Price |
$100.00 |
|
Issue Size* |
[$50,000,000] |
Accrued |
$0 |
|
Par Value |
$100 |
Capital Price |
$100.00 |
|
Fixed / Floating |
Fixed |
Running Yield** |
7.00% |
|
Payment Frequency |
Semi Annual |
Yield to Maturity*** |
7.00% |
|
Current Distribution** |
7.00% |
Trading Margin** |
7.00% |
|
Issue Margin** |
7.00% |
Optional Call Date |
21 April 2019 |
|
Franking Credits Inclusive |
No |
Legal Final Maturity |
21 April 2021 (4Y) |
|
ASX Listed |
No (ISIN: TBA) |
Next Ex-Date |
14 October 2017 |
|
Convertible |
No |
Next Payment Date |
21 October 2017 |
|
GICS Sector |
Real Estate |
Next Cash Distribution** |
$1.13 |
*Issue size is subject to change but expected to be $50 million. **Actual cash amount dependent on tranche and based on $100 face value.
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Floating Rate Notes
|
Product Type |
Corporate Bonds |
Last Price |
$100.00 |
|
Issue Size* |
[$10,000,000] |
Accrued |
$0 |
|
Par Value |
$100 |
Capital Price |
$100.00 |
|
Fixed / Floating |
Floating |
Running Yield** |
6.30% |
|
Payment Frequency |
Quarterly |
Yield to Maturity*** |
6.87% |
|
Current Distribution** |
6.30% |
Trading Margin** |
4.50% |
|
Issue Margin** |
4.50% |
Optional Call Date |
21 April 2019 |
|
Franking Credits Inclusive |
No |
Legal Final Maturity |
21 April 2021 (5Y) |
|
ASX Listed |
No (ISIN: TBA) |
Next Ex-Date |
14 July 2017 |
|
Convertible |
No |
Next Payment Date |
21 July 2017 |
|
GICS Sector |
Real Estate |
Next Cash Distribution**** |
$1.57 |
*Issue size is subject to change but expected to be $50 million. **Based on prospective issue margin below plus 90-Day BBSW of ~1.795% ***Based on prospective issue margin in the range of [4.50%] & interpolated swap rate to the call of 2375%.****Actual cash amount dependent on tranche and based on $100 face value.
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