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Charter Hall Retail REIT restructured debt platform


Charter Hall Retail REIT (ASX:CQR) (the REIT) today announced the completion of several key initiatives to restructure its debt funding platform:

• US$200 million (A$252 million) US Private Placement (USPP) issuance:– 12 year duration– Fixed US$ coupon of 3.55% which is 100% hedged in Australian dollars and represents a margin of 194 basis points over BBSW

• Transition to a fully unsecured debt facility: To complete on 28 September 2015.

• Restructured syndicated bank debt facility: Agreed terms for tranches of 18 months ($150 million), 3 years ($150 million) and 5 years ($285 million) for a total facility limit of $585 million, from a previous limit of $535 million.

Moody’s have assigned a provisional issuer credit rating of (P) Baa1, conditional on completion of these initiatives.

The REIT’s covenant package has changed, and now includes a gearing covenant1 of 50% and interest cover ratio covenant of 2.0 times.The REIT’s existing CMBS facility will remain in place until 28 September 2015 and will be repaid from the proceeds of the USPP issuance. The USPP will be funded on 22 July 2015 and is subject to standard investor due diligence and documentation. The revised unsecured bank debt facility will be effective from this date.

Commenting on the USPP, Deputy Fund Manager Philip Schretzmeyer said: “We are very pleased with the response from US investors to this inaugural issue. It was well supported with the offering being approximately six times oversubscribed. This is a reflection of the quality of the REIT’s non-discretionary focused portfolio”.

These initiatives will increase the REIT’s weighted average debt maturity from 3.1 years to 6.02 years and significantly reduce the weighted average debt margin3 from 177 basis points to 155 basis points per annum.

Fund Manager Scott Dundas said: “These transactions reflect the REIT’s focus on prudent capital management and results in enhanced tenor, flexibility and scalability of the REIT’s debt platform”.



1 Based on Look through Total Liabilities divided by Look through Total Assets.

2 Calculated at 30 April 2015 and excludes A$CMBS facility.

3 Includes the REIT’s share of JV debt ($117.5m) and amortisation of upfront debt costs and excludes line fee on undrawn debt.


<View PDF version of ASX release >