Dexus has successfully priced $500 million of subordinated notes in the Australian domestic market, buoyed by robust investor demand. The issuance is split evenly between two tranches: $250 million in 30-year floating rate notes, and $250 million in 30-year fixed rate notes. Dexus is a leading Australian real estate group that owns, manages, and develops high-quality office, industrial, retail, and healthcare properties. They also actively manage office, industrial, retail and healthcare properties located in key markets.
The floating rate notes feature a 5.25-year non-call period and a margin of 1.75 per cent over the 3-month Bank Bill Swap Rate (BBSW). The fixed rate notes have an 8.25-year non-call period and an initial coupon of 6.30 per cent, which has been swapped to a floating margin of 1.85 per cent over BBSW.
Both tranches of notes, which are callable in March 2031 and March 2034 respectively, have been granted 50 per cent equity credit from both S&P and Moody’s. Dexus anticipates that this new capital will provide enhanced financial flexibility, diversify its funding sources, and extend the overall debt maturity profile of the company.
Settlement of the subordinated notes is scheduled for December 10. The issuance represents a significant move for Dexus as it continues to optimise its capital structure and financial position within the Australian market.
