Goodman Group (Goodman or Group) has launched a “par for par” exchange offer for US$1 billion of its US 144a Bonds that expire in 2021 and 2022.
Key terms of the par for par exchange offer include:
- Coupon, maturity, payment terms and guarantee unchanged
- Tighten leverage covenant from 60% to 55%
- Unencumbered real property assets covenant removed
The transaction is subject to majority acceptance and an upgrade to the Group’s credit rating. The Group has already received commitments for exchange and consent from holders representing approximately 33% of the 2021 Bonds and approximately 32% of the 2022 Bonds. The Group has also received similar consent from its banks to amend the covenants with respect to all of its debt facilities.
If majority acceptance is achieved, the Group intends to formalise the reduction of its target gearing range to 0%-25% from 25-35% in its Financial Risk Management Policy. The level of gearing will be determined with reference to the mix of earnings and credit ratios consistent with the rating of the Group. This is in line with the capital management strategy which has been operating in recent years and will result in no changes to the Forecast FY2017 Operating Earnings of the Group. As at 31 December, gearing was 8.7%.