The AMP Capital Wholesale Office Fund has withdrawn its $300m-plus bond issue from the market as its parent company continues to face criticism over its handling of a high-profile sexual harassment incident by a senior executive.
The fund that owns some of the country’s most high-profile office developments such as Sydney’s Quay Quarter in the CBD was in search of at least $300m in a seven to 10-year bond deal to help refinance a
medium-term note maturing next year.
However, the offering was pulled after investors were unprepared to meet price expectations.
It comes after AMP promoted Boe Pahari to the head of AMP Capital even though he had been penalised over a harassment incident several years earlier.
Shareholder pressure is building against AMP to release details of the company’s handling of the sexual harassment claim and for Mr Pahari’s departure.
The attempts by the property fund to tap the market also follows the departure of AMP senior executive Alex Wade, which is understood to be linked to inappropriate conduct.
Compounding the challenges for the office fund is that it is also negotiating with tenants looking to cut workforces to endure the tough COVID-related conditions and seeking rent relief.
Meanwhile, other groups set to sound out the market for bond issues next week include Aurizon and Suncorp.
Both groups will be carrying out roadshows for their raisings.
Suncorp will issue a Tier 2 bond that is expected to be about 230 basis points above the Bank Bill Swap Rate (BBSW).
Aurizon is in search of investors to commit to a 10-year bond after already launching a four-year bond in the market that trades at about 143 basis points above the BBSW.
The understanding is that it is hoping to price its latest offer at about 200 basis points.
Demand for bond issues is soaring amid the low interest rate environment, and corporates will no doubt be pricing deals at the highest rate possible to capitalise on the conditions.
Goodman Group is in search of at least $300m in a seven-year offering and other groups tapping the bond market include insurers QBE, IAG and supermarket chain Coles.
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