Amid further controversy at AMP, some think the move by its wholesale office fund to tap the bond market is bad timing.
It is understood that the AMP Capital Wholesale Office Fund is planning to reach out to debt investors as early as Tuesday, with the expectation it will seek at least $300m to help refinance a medium-term note maturing next year.
But bond market investors are hoping that when it comes to pricing, the high drama and tough office sector conditions will be in their favour.
The fund owns buildings such as central Sydney’s Quay Quarter. It is one of the many landlords negotiating with tenants looking to cut workforces to endure the tough COVID-19-related conditions and seeking rent relief to compensate for social distancing requirements linked to the global pandemic.
The seven to 10-year bond deal is happening just days after the departure of AMP senior executive Alex Wade, which is understood to be linked to inappropriate conduct and lewd photos.
Weeks earlier, the promotion of Boe Pahari to the head of AMP Capital came under the spotlight after it emerged he had been financially penalised over a harassment incident several years earlier.
After years of poor performance at AMP, private equity firms including Blackstone and Kohlberg Kravis Roberts have been running the ruler over the Australian-listed financial.
Its $4.86bn market value suggests investors are treating AMP’s wealth business as worthless, say analysts, which could make the company attractive for buyout funds.
However, most believe they would avoid the business because they would not be offered any indemnity for prior conduct.
Many buyers, particularly in the real estate community, are trying to work out how to pry loose the more attractive asset manager AMP Capital.
There has even been talk that some of the decision-makers in that division are as keen for a split from the parent as prospective acquirers.
Earlier this year AMP’s banker UBS was said to be considering selling a stake in AMP Capital and many believe that is still within the realms of possibility.
It all makes for an interesting half-year results presentation by AMP on Thursday.
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