CFS Retail Property Trust has secured a new $245 million long-dated debt through a separate bilateral bank debt facility and a private placement to US debt investors.
The $125 million bilateral bank debt facility is for a term of five years, with a forward start date of 2 September 2012. The trust also issued $120 million of USPP notes in three tranches over 10, 12 and 15 year periods. The debt issuances enhance the duration and diversification of the trust’s debt maturity profile whilst also adding another source of bank debt.
CFX fund manager Michael Gorman said the trust signed a bilateral bank debt facility agreement with a major Asian bank, which is a first for the trust.
The USPP issuance was rated ‘A” by Standard & Poor’s and follows a successful US debt roadshow undertaken earlier in May 2012, with Commonwealth Bank of Australia the lead arranger.
The USPP issuance comprised three tranches ranging between 10 and 15 years:
• $40 million on a 10-year maturity expiring in 2022 with a 6.2% AUD coupon
• $US60 million on a 12-year maturity expiring in 2024 at a 3.63% USD coupon, and
• $US19 million on a 15-year maturity expiring in 2027 at a 3.88% USD coupon.
“For a modest increase in the cost of our debt, by around 0.1% to 6.1%, we have been able to increase the weighted average duration of the trust’s debt profile by 0.4 years to 3.5 years. Importantly, all of the trust’s debt facilities rank pari passu and remain senior and unsecured,” Gorman said.
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