SUM - Summerset Group

[Sideshow Bob]

Summerset Launches Fixed Rate Retail Bond Offer

7/9/2020, 8:31 amOFFERNZX & ASX RELEASE
7 September 2020
SUMMERSET LAUNCHES FIXED RATE RETAIL BOND OFFER
Summerset Group Holdings Limited (Summerset) announced today that it is offering up to NZ$100 million (with the ability to accept up to NZ$50 million of oversubscriptions at Summerset’s discretion) of seven year fixed rate bonds maturing on 21 September 2027 to New Zealand institutional and retail investors.
The interest rate will be the sum of the issue margin plus the seven year base rate, but in any case will be no less than the minimum interest rate of 2.30% per annum. The actual issue margin may be above or below the indicative issue margin range. The indicative issue margin range for the bonds is 2.00% to 2.20% per annum. The issue margin and interest rate will be set following a book-build process on 11 September 2020 and will be announced by Summerset via NZX shortly thereafter.
The offer will close on 11 September 2020 following the book-build process, with the bonds expected to be issued on 21 September 2020.
Full details of the bond offer are contained in the Indicative Terms Sheet, available through www.summerset.co.nz/bondoffer or by contacting the Joint Lead Managers, the Co-Manager, or your usual financial adviser, and must be obtained by investors before they decide to acquire any bonds.
Summerset has applied for the bonds to be quoted on the NZX Debt Market.
There is no public pool for the bonds, which will be reserved for the Joint Lead Managers, the Co-Manager, institutional investors and other primary market participants invited to participate in the book-build.
Joint Lead Managers
ANZ 0800 269 476
Craigs Investment Partners 0800 226 263
Forsyth Barr 0800 367 227
Jarden 0800 005 678
Co-Manager
Hobson Wealth Partners 0800 742 737
ENDS

[winner69]

Bob ...they’ll probably get the $150m

[Beagle]

Good move by the investment banker. Just keep borrowing more and more money...what could possibly go wrong ?

[Sideshow Bob]

Bob ...they’ll probably get the $150m

That will be a $0.00 from me....

[Beagle]

That will be a $0.00 from me....

2.30% less tax, (assumed at 33% for serious investors on here) = 1.54% net. If the Reserve bank achieves its mandated mid point of the inflation target of 2% on average, investors in real terms will get a negative return of 0.46% per annum for the next 7 years. Great deal for SUM and the Govt but investors...oh dear...

[winner69]

Good move by the investment banker. Just keep borrowing more and more money...what could possibly go wrong ?

Betcha Oceania will try the same trick soon

[Beagle]

That's a pretty safe bet as they're on record as mulling that over for some time now.

[winner69]

That's a pretty safe bet as they're on record as mulling that over for some time now.

Good move if Oceania do a bond issue

Just keep borrowing more and more money...what could possibly go wrong ?

[peat]

kinda surprised its not an equity issue given the heights of the share price.

7 years seems a popular term these days, quite a few of them out there recently. wow imagine what the markets will be like in 7 years.
No one has a clue.

Will just over 2% p.a. be a useful return on your savings for this lengthy time frame?

[Beagle]

kinda surprised its not an equity issue given the heights of the share price.

7 years seems a popular term these days, quite a few of them out there recently. wow imagine what the markets will be like in 7 years.
No one has a clue.

Will just over 2% p.a. be a useful return on your savings for this lengthy time frame?

Crazy world we live in now isn't. SUM already have two bond issues in the market and their 2025 bonds are bid fairly strongly at 1.8% with no sellers, go figure ?