Warehouse bonds strike the right note with investors

Despite posting flat earnings in its most recent result, investors still like the look of the big red shed, with the Warehouse confirming today that bids received for its inaugural bond offer were more than twice the $100 million issue size.

In an announcement to the NZX this morning, the Warehouse said the interest in the bond offer meant there would be no public pool, with the entire amount reserved for the clients of those who participated in the bookbuild process.

Craigs Investment Partners was the lead manager for the offer, with ANZ, Bank of New Zealand and Forsyth Barr appointed as co-managers.

The Warehouse has set a minimum interest rate of 7.3% per annum with a margin of 2.15% for the unsecured, fixed rate bonds which mature in June 2015.

The offer officially opens tomorrow with an issue price of $1.00 per bond and a minimum application amount of $5000. Interest will be paid semi-annually.

The retailer launched the bond offer earlier this month, with the funds destined to be applied to the reduction of existing bank debt and to financing the planned construction of new and replacement stores.

On the same day it announced the bond plan, the company revealed its revenue for the six months ended January was down 0.5% to $918.9 million, while operating profit fell 1.2% to $83.2 million, although it did increase its interim dividend by 1.5cps to 17.0cps

The company’s share price (NZX: WHS) did dip slightly in the aftermath of the results, but has since recovered and was up 5c in this morning’s trading to $3.98.

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