Dexus to tap bond market for $500m-plus as it extends debt runway

Dexus, which is selling its tower at 100 Mount Street, North Sydney, will raise more than $500m through two 30-year bonds as part of its capital management strategy.

Australian-listed real estate and infrastructure group Dexus is expected to raise over $500m from the bond market this week as part of its capital management plan.

The raise is part of its ongoing capital recycling and is to diversify funding sources and extend its debt maturity profile.

It also provides the group with financial flexibility to pursue investment opportunities in line with strategy.

The property group will raise the funds through two separate tranches with a final maturity in 2055.

One of the offerings is a 30-year floating bond that is non-call for 5.25 years (2031), with an initial margin of 200 basis points over the three-month bank bill swap rate.

Also, a 30-year fixed to floating rate note with a non-call of 8.25 years when it is fixed, before switching to floating for the remainder of the tenor.

The initial yield is 6.528 per cent before switching to a floating rate of 210 basis points above the bank bill swap rate.

Working on the raise are UBS as arranger, while ANZ, CBA, UBS, HSBC and Westpac are lead managers.

Moody’s has provided a Baa1 rating and S&P an expected triple-B rating.

The bond prices on Thursday.

It comes after the Australian property group sold the Sydney office building The Bond in October for about $280m and placed the NBN headquarters building on the market at 100 Mount St in North Sydney for close to $600m.

The $7.9bn listed asset manager and developer is the country’s largest office landlord and its entire portfolio of real estate and infrastructure assets are valued at $50.1bn.