Precinct considers bond offer, lifts first-quarter dividend

Precinct Properties New Zealand is considering a seven-year bond offer to repay bank debt.

The listed commercial property investor says it is considering making an offer of secured, unsubordinated, fixed-rate seven-year bonds to institutional and New Zealand retail investors, with details to be released next week when the offer is expected to open. It has appointed ANZ, First NZ Capital and Forsyth Barr as joint lead managers and Hobson Wealth Partners as co-manager.

"We believe this option is well suited to Precinct's current strategy and will further improve our capital structure post issue," chairman Craig Stobo said in his speech to the company's annual meeting in Auckland this morning, according to notes published on the NZX. "Diversifying our funding sources remains a core component of Precinct's capital management strategy. We will prudently consider future funding options, which are well suited to Precinct's strategy and further improve our capital structure."

Precinct increased annual profit 17% to $162.1 million in the latest financial year ended June 30. Mr Stobo said the company's gearing was now at 18%, from 25.1% at the end of 2017, after the company raised $150 million of four-year, fixed-rate subordinated convertible notes in September.

The company also today said it would pay a 1.45c cet per share first-quarter dividend, up 3.6% on a year earlier. It expects to pay a 5.8c per share dividend for the 2018 financial year, up from 5.6c in 2017, and is confident about the dividend growth into the future.

The shares dipped 0.4% to $1.29, and have gained 7.9% this year.


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