Biggest NZ landlord pulls bond offer after Brexit

Kiwi, which owns the Vero Centre, has ditched a bond offer after Brexit.
Kiwi, which owns the Vero Centre, has ditched a bond offer after Brexit.

Brexit has killed a big bond offer by New Zealand's largest listed landlord.

Last Friday, NZX-listed Kiwi Property Group, with $2.1 billion of real estate, announced it was "considering an offer of seven-year fixed rate senior secured bonds to New Zealand institutional and retail investors."

With the New Zealand property market running hot, that got many institutional investors interested and the market was poised for the next announcement, which would have laid out how much money was being raised and the terms and conditions.

Kiwi was going to offer debt securities of the same class as existing quoted debt securities.

"The bonds are expected to be quoted on the NZX Debt Market. It is expected that full details of the bond issue will be released prior to the offer opening, which is expected to be in the week beginning June 27," Kiwi told the NZX on Friday.

Now, it has announced that bond offer won't go ahead due to financial uncertainty caused by Brexit.

"Kiwi Property has decided today to defer its planned retail bond offer given the significant and continued market volatility following the United Kingdom's referendum on European Union membership. Kiwi Property will notify the market if a decision to proceed with the offer is subsequently made," it says.

Shane Solly of Harbour Asset Management was unsurprised by the decision.

"This is a measured decision by Kiwi management to defer the bond offer, given the Brexit market moves. There are some signs that capital markets are stabilising post Brexit, with expectations of further monetary stimulus packages from central banks. There is good investor appetite for debt issuance from quality issuers like Kiwi at the right price," Solly said.

Pre-Brexit, Kiwi had already appointed Deutsche Craigs and Westpac via its New Zealand branch as joint lead managers with Bank of New Zealand as co-manager.

Investors had already been invited to register their interest but no money was ever sought and no bonds could be applied for until the offer opened. No dollar amount was ever put on the now-ditched deal either.

Kiwi says it is the largest listed property company on NZX, in business for more than 20 years, owning and managing a $2.1 billion portfolio of real estate, comprising some of New Zealand's best shopping centres and prime office buildings.

Its assets including Sylvia Park and the Vero tower on Shortland St, as well as many other properties.

- NZ Herald

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