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Stockland Locks in Long Term Debt


In an effort to sure up Stocklands balance sheet ahead of a likely deterioration in valuations, Stockland will replace existing debt with a new $200m Medium Term Note issue as well as a new US Private Placement (USPP) notes for A$351 million.

The 5 year Domestic Note for A$200 million, matures on 22 March 2024. It was issued with a coupon of 3.30% (exclusive of fees).

The long-dated USPP Note comprised three tranches in US dollars of 10, 12 and 15 years totalling US$250 million. The transaction was priced in Australian dollar terms at a weighted average spread over BBSW of +170bps (exclusive of fees).

The three tranches are as follows:

  • US$115 million with a tenor of 10 years maturing April 2029;

  • US$115 million with a tenor of 12 years maturing April 2031 and

  • US$20 million with a tenor of 15 years maturing April 2034.

Funds from the Note issuances will replace other short term debt funding obligations.

Tiernan O’Rourke, Chief Financial Officer at Stockland, said: “These raisings reconfirm Stockland’s ongoing ability to access global debt capital markets at attractive prices and long tenors supporting the delivery of our strategic priorities.

Stockland’s pro-forma Weighted Average Debt Maturity profile at 31 December 2018 would increase from 5.3 to approximately 5.8 years, taking into account these transactions.

Stockland's performance in 2018/19 has been relatively poor with a 12% decline in unit price since January 2018, compared to the ASX AREIT index which has risen 10%.

Stocklands exposure to the retail and residential markets is seen to be the contributing factor to the under performance. With residential funding and approvals dropping significantly, the valuation of the underlying assets is at risk of decline.

In its annual results announced in August this year, Stockland advised that it had negotiated a higher LVR covenant of 50%, (currently at 26.4%) perhaps in anticipation of a softening in valuations.

SGP Trading Chart vs ASX200 AREIT

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Purple ASX200 AREIT

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