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17 Sep 2020

Scentre Group Prices US$3.0 Billion of Subordinated Hybrid Notes

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Scentre Group today priced a US$3.0 billion (A$4.1 billion) subordinated hybrid note issue in the United States market. The hybrid note issue comprises:

  • US$1.5 billion 60-year, non-call 6-year subordinated notes with a coupon of 4.75%
  • US$1.5 billion 60-year, non-call 10-year subordinated notes with a coupon of 5.125%

The hybrid notes have a 60-year maturity date and can be redeemed by the Group at par with cash from the call date. The notes do not contain any equity conversion features.

This is the Group’s inaugural issuance of hybrid notes which diversify the Group’s sources of capital and are expected to be a long-term feature of the Group’s funding.The Group now has sufficient long-term liquidity to cover all debt maturities to early 2024.

The notes will receive a 50% equity credit from the rating agencies and on this basis the 30 June 2020 proforma Debt to EBITDA would be 6.4 times. The hybrid notes are not included as liabilities for the Group’s bank and bond covenants and on this basis the 30 June 2020 proforma gearing would be 27.6%.

Following the issuance the Group will reduce its indebtedness including borrowings under the Group’s revolving bank facilities.

Subject to unforeseen circumstances, the Group’s current intention is to make a distribution in early 2021 from surplus net operating cash flows during the period ending 31 December 2020.

Authorised by the Board.

This announcement is not an offer of securities for sale in the United States (“US”). The securities referred to in this announcement have not been, and will not be, registered under the US Securities Act of 1933 (the “US Securities Act”) or under the securities laws of any State or other jurisdiction of the US and may not be offered or sold in the US or to, or the benefit or account of, “US persons” (as defined in Regulation S under the US Securities Act) in the absence of registration unless in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US State securities laws.