This offer closed on:
09 April 2021
Secured, Redeemable Notes Offer
Morgans is a Joint Lead Manager to the Offer1
Centuria Funds Management Limited as trustee of the Centuria Capital No. 2 Fund (Issuer) has announced it is seeking to raise $190 million through the inaugural issue of ASX listed secured, redeemable notes (Centuria Notes) (Notes) (C2FHA).
Centuria Notes may be suitable for investors looking for regular quarterly income by way of floating rate interest payments and offer investors the opportunity to further diversify their income portfolio.
Centuria Capital Group
The Issuer is a 100% owned subsidiary of Centuria Capital Group (ASX:CNI), a leading real estate funds manager and currently manages $10.2 billion of assets predominantly in listed and unlisted real estate funds.
The Issuer holds strategic equity investments in a number of listed and unlisted property investments including Centuria Industrial REIT (ASX:CIP) and Centuria Office REIT (ASX:COF).
Please contact your Morgans adviser to discuss the suitability of investing in Centuria Notes given your specific investment objectives, current portfolio holdings and if appropriate secure an allocation.
It is important you read the Replacement Prospectus in full before deciding to invest in the Notes and, in particular, you should consider the risk factors in Section 6 before deciding whether to apply.
Key features of the Offer
- Centuria Notes offer the opportunity to diversify your income portfolio with secured corporate debt exposure
- Ability to secure a Broker Firm allocation via Morgans in Centuria Notes
- Centuria Notes have a face value of $100 and a maturity date of 20 April 2026 (5 years)
- The Issuer may elect to redeem the Notes on the optional redemption dates of 18 months, 12 months and 6 months before the Maturity Date3
- Quarterly compulsory cash interest payments4, equal to the 3 Month Bank Bill Rate plus a margin of 4.25%5 i.e. approximately 4.28% p.a6
- Are senior, secured notes ranking only behind obligations preferred by law and ahead of any ordinary shares and preference shares7
- Interest payments are compulsory, guaranteed by Centuria Capital Limited (one of the stapled entities of CNI); non-payment is an event of default8
- Expected to be quoted on the ASX under the code C2FHA9
Proceeds of the Offer
The Offer proceeds will be used to:
- Redeem $28.5 million of Wholesale Notes that mature in April 2021;
- Redeem $45 million of fixed rate Wholesale Notes that mature in April 2023; and
- Support Centuria Capital Group's REIT co-investment programme, strategic acquisitions and to accelerate the growth of its unlisted property funds division.
Security and Ranking
- The Security for Noteholders is held in a Security Pool, of which Centuria Noteholders will be a beneficiary.
- The Security Pool is established under the Security Trust Deed and a summary of the assets in the Security Pool is set out in Section 4.5 of the Prospectus.
Issuer: Centuria Funds Management Limited as trustee of the Centuria Capital No. 2 Fund
Transaction: A$ Secured, Redeemable Notes
Morgans Role: Joint Lead Manager
Offer Size: $190 million
Offer Opening Date: 30 March 2021
Morgans Broker Firm applications closing date: 14 April 2021
Investments in Centuria Notes may be affected by the ongoing performance, financial position and solvency of the Issuer. There are a number of risks associated with an investment in Centuria Notes, many of which are outside the control of the Issuer. Before applying for Centuria Notes all investors should consider whether the Notes are a suitable investment for them including by considering the key risks as outlined in Sections 1.6 and 6 of the Replacement Prospectus.
There is a risk that the Issuer may not pay when scheduled or default on payment of some or all of the face value, Interest or other amounts payable on Centuria Notes. If the Issuer does not pay the amount owing, Holders may lose some or all of the money invested in the Notes.
No cooling off rights (whether by law or otherwise) apply to an investment in Centuria Notes. This means that, in most circumstances, Applicants may not withdraw their Applications once submitted.
- Morgans will receive fees for its role.
- The Issuer may issue more or less than $190 million of Centuria Notes.
- If the Notes are redeemed 18 months before the Maturity Date, the Issuer must pay 101% of the face value on redemption. If the Notes are redeemed 12 or 6 months before the Maturity Date, the Issuer must pay the face value on redemption.
- Interest payments are compulsory; non-payment is an event of default. Interest Payments will not have any franking credits attached to them.
- Margin was set via the bookbuild on 26th March 2021.
- Based on 3 Month Bank Bill Rate of 0.03%.
- While ranking equally with any other secured creditors.
- Full detail is contained in the Replacement Prospectus and Morgans Offer Summary.
- The Notes are expected to be quoted on ASX. Holders may seek to sell Notes on ASX, but there is no guarantee they will be able to do so, or do so at an acceptable price. This may particularly be the case if the Issuer's ﬁnancial position or performance, or broader economic or market conditions, materially deteriorate.
Investors should read the Replacement Prospectus in full to understand the features and risks of Centuria Notes. Please contact your Morgans adviser to apply under the Offer.
If you have any questions about the Offer, please contact your Morgans adviser, call 134 226 or find your nearest office.
Centuria Notes are being offered only in Australia and New Zealand and the Replacement Prospectus will only constitute an offer to a person receiving it in Australia or New Zealand. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the Replacement Prospectus (including an electronic copy) in jurisdictions outside Australia and New Zealand may be restricted by law.
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