Precinct Properties raises $100m in oversubscribed bond, rate set at 4.42 per cent

Precinct Properties chairman Craig Stobo. Photo / Dean Purcell

Precinct Properties New Zealand has raised $100 million in an oversubscribed seven-year bond, paying annual interest at the bottom end of its indicative margin.

The Auckland-based commercial property investor's $75m offer was oversubscribed, with all $25m of extra allocations taken up, it said in a statement.

The price was set in a bookbuild at a margin of 1.5 per cent above the seven-year swap rate, the bottom of an indicative range between 1.5-and-1.6 per cent. The bonds will pay annual interest of 4.42 per cent.

The funds raised will repay bank debt and be used for corporate purposes, the company said.

Precinct's seven-year bond is its second debt market issue this year, after it raised $150m in September through a four-year, fixed rate convertible note paying annual interest of 4.8 per cent.

Persistently low interest rates have kept companies keen on raising capital through the debt market, which has seen $2.77 billion of new listings compared to just $480m of new equity listings.

The company's shares slipped 0.4 per cent to $1.305, having gained 9.2 per cent so far this year. The stock's trading at a yield of 4.3 per cent.