Dexus Property Group is understood to be poised to fire the starting gun on a convertible bond raising, understood to be worth between $400m to $500m.
Sources say that the raise is imminent and will see the Australian listed property group work with investment banks Citi and Bank of America.
Westfield shopping mall owner Scentre Group launched a hybrid issue in 2020 through UBS to reduce its debt level and Dexus has used the convertible bond market in the past.
This was at the time it purchased full control of Sydney’s MLC Centre, outlaying about $800m.
It issued $425m of Guaranteed Exchangeable Notes that listed in Frankfurt, Germany, at 2.3 per cent with a fixed exchangeable price of $15.05 per security.
At that time, Citi and Bank of America also worked on the raise, accompanied by JPMorgan.
Dexus then said could have purchased the asset with debt, with $1bn in undrawn debt facilities and cash, plus $231m in proceeds from the sale of its Macquarie Park asset, but opted for the bond.
Market analysts said that convertible bonds offered an alternative form of funding that did not appear on the balance sheet.
The raise comes at a time that corporate debt remains expensive, and some speculate that Dexus can gain funds at a more attractive price through convertible bonds.
Market analysts say that Australia’s largest office landlord is not in a position where it needs to raise equity.
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