Shopping centre owner Scentre Group has priced a two tranche $US3 billion ($4.1 billion) subordinated debt deal, after getting in front of fixed income investors earlier this week.
Scentre will issue $US1.5 billion worth of subordinated notes with 6-year non-call periods and 60-year final maturity, and $US1.5 billion worth of the same notes but with a 10-year non-call period.
The 6-year non-call notes will yield 4.75 per cent, while the 10-year non-call notes will yield 5.125 per cent.
Importantly, the notes will qualify for 50 per cent equity credit with all three ratings agencies.
Scentre said the hybrid notes would not be included as liabilities for its bank and bond covenants “and on this basis the 30 June 2020 proforma gearing would be 27.6 per cent”.
The notes are expected to be rated Baa1 by Moody’s and BBB+ by Standard & Poor’s.
Bookrunners on the deal included UBS, ANZ, BNP Paribas, CBA, Citi and HSBC.
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