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Precinct Properties 4 Year Convertible Notes (PCTHA)
Precinct Properties New Zealand Limited (Precinct) has announced an offer of up to $150 million of subordinated convertible notes (Notes), paying at least 4.8% p.a for four years
The convertible element is a little bit interesting in that it provides potential upside due to the way it is structured.
The Conversion Price is the lesser of:
the Conversion Price Cap of $1.40; and
a 2% discount to the Market Price (referred to below as the discounted approach).
Effectively if the share price is above 1.40 in four years Note holders will benefit.
Issuer:
Precinct Properties New Zealand Limited
Instrument:
Fixed rate, unsecured, subordinated convertible notes
Maturity Date:
27 September 2021 (4-year convertible note)
Issue Rating:
The Notes will not be rated.
Size:
Up to NZ$150 million, with the ability to accept up to a further NZ$50 million in oversubscriptions
Interest Rate:
Minimum 4.80%
The indicative margin range above the 4-year swap rate for the Notes is 2.25% to 2.45% per
The oversubscription of the Heartland Bank offer has confirmed there is a lot of money looking for a home..........
For clarity, nothing I say is advice....
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Member
Is the interest paid quarterly?
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Originally Posted by mcdongle
Is the interest paid quarterly?
yes it is.
For clarity, nothing I say is advice....
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Member
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Member
i am ignorant in this area of finance, is this a good deal?
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Originally Posted by voltage
i am ignorant in this area of finance, is this a good deal?
Its difficult to answer that categorically voltage, but in the fixed interest arena at the moment its is pretty good in my opinion.
In the last two weeks Heartland bank offered 4.5% for five years, ANZ Bank offered 3.7% for 5 years , so 4.8% with some potential for upside on the conversion strikes me as attractive.
Of course one needs to be comfortable with the solidity of the Issuer, i.e will they be able to pay you back at maturity? I consider that Precinct has a quality property portfolio and is not overly leveraged so in my view it is very unlikely they will experience difficulty within four years and so it is very likely you will get repaid (in shares) at maturity. They will convert the notes to shares at a minimum of $1.02 and possibly more. At that point of course you can sell those shares to release your cash.
So in a few words, if you are a fixed interest investor then yes - I think it is a good deal.
For clarity, nothing I say is advice....
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Colmar Brunton Research
Colmar Brunton NZ - Paid research interviews
Hi all,
Apologies for being slightly off-topic; I'll keep this as short as possible.
Colmar Brunton is conducting some research on behalf of the Financial Markets Authority (FMA) about what information investors find most helpful to make informed decisions about particular investments. This will help the FMA improve product disclosure documents to make them more useful for investors. We're looking for people to take part in paid research interviews at our Auckland and Wellington offices over the next few weeks.
We'd like to talk with you if you have recently invested in the Precinct Properties' subordinated convertible notes.
Your contact details and the feedback you provide in interviews will be completely annonymised and will not be used for any other purpose. If you are interested in taking part, please email ali.ajmal@colmarbrunton.co.nz with your contact details including a phone number.
Cheers
PS: If you're interested, please get in touch via the email above as direct messages on ST won't be acknowledged.
PPS: This message was cleared with an ST Admin before being posted.
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Member
Does anyone know what the acquisition settlement obligation is? I know not that material.
Forecasted development profit of $242m from Bowen and Commercial Bay will add some nice breathing room. Add that on to the NTA calculation and you get around 4c above $1.40.
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brutal scaling on this...
I would envisage they will list at a premium
Priority offer is the way to go
if you own Precinct ordinary shares - fill your boots up.
For clarity, nothing I say is advice....
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Shame that someone didn't point out that formal expressions of interest needed to be in by Friday 1 September and a client service agreement completed too.
Several wasted hours of my life researching this on the weekend that I cannot get back. Not impressed !
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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