Charter Hall Long WALE Raises $180M for more Acquisitions


The Charter Hall Long WALE REIT announced this week that it will undertake a fully underwritten institutional placement to raise approximately $180 million to fund the two recent acquisitions (Brisbane Bus Terminal and the Thales Head Office in Sydney Olympic Park) and associated transaction costs.

The placement is fully underwritten by J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch and will be issued at a fixed price of $4.74 per security, which represents a:

• 3.9% discount to the last close of $4.93 on 4 June 2019

• 3.2% discount to the 5 day VWAP of $4.90 on 4 June 2019

• FY20 Operating EPS yield of no less than 5.9%

Securities issued under the placement will rank equally with existing CLW Securities and will be entitled to the distribution for the three months to 30 June 2019.

As part of ongoing capital management, the REIT also completed the following initiatives: • Extended its existing bank debt facility by one year;

• Introduced a new offshore lender with a new $100 million, five year debt facility;

• Entered $200 million of new interest rate swaps; and

• Reset $100 million of interest rate swaps with 6 years remaining term to capitalise on the low interest rate environment.

Following these initiatives, the REIT has no debt maturing until FY23 and the weighted average hedged rate has reduced from 2.5% to 2.1%

Following the acquisitions, the capital raising and the ongoing capital management initiatives and barring any unforeseen events and no material change in market conditions, CLW provides the following guidance:

• FY19 Operating EPS of 26.9 cents per security, at the upper end of previous guidance

• FY20 Operating EPS growth guidance of no less than 3.75%.

Tthe REIT's pro-forma balance sheet gearing is forecast to be 29.3%, within CLW's target range of 25 – 35%; and look through gearing is forecast to be 35.9%.

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Email: warwick@cmaust.com

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