Chapman Tripp acts on major real estate firm’s $150m note offer

by Paolo Taruc29 Sep 2017
Chapman Tripp has advised major real estate company Precinct Properties on its $150m offer of subordinated convertible notes, the law firm announced on Wednesday.

The transaction consisted of a priority offer of up to $25m of notes to eligible New Zealand-resident Precinct retail shareholders, together with a general offer to investors resident in New Zealand and certain overseas institutional investors.

Precinct owns inner-city office spaces in Auckland and Wellington, and leases these out to businesses.

Finance partner Cathryn Barber, corporate partner Roger Wallis;, and senior associate Luke Ford advised the Precinct team, which lodged the product disclosure statement for the offer last month.

Barber also advises Precinct on its syndicated bank facilities, as well as assisting on its earlier retail senior secured bond issue and US private placement, the law firm said.

The interest rate was set at 4.80% per year. At the end of their four-year period, the notes convert into Precinct ordinary shares with a conversion price of the lesser of $1.40 and a 2% discount to volume-weighted average price (VWAP).

However, the real estate firm may opt to pay a cash amount of holders of the notes rather than converting the notes into shares. Precinct’s net profit after tax rose by annualized 17.3% during the previous fiscal year on a higher occupancy rate, and a greater hold in Auckland (72%) and Wellington (28%) markets.

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