GPT RE Limited in its capacity as responsible entity for the General Property Trust
Australian Medium Term Note Program dated 16 January 2012
Dated 20 January 2012 and subsequently 26 July 2012
Nature of the bonds
The Bonds are direct, unsubordinated and unsecured obligations of the Issuer and rank at least without preference or priority among themselves and at least equally with all present and future unsubordinated and unsecured obligations of the Issuer except those mandatorily preferred by law.
6.75% per annum, payable semi-annually (in two coupons of 3.375%) in arrears, on 24 January and 24 July in each year, including the Maturity Date.
Repayments at the maturity date
On the Maturity Date, Bondholders are scheduled to receive the Face Value and the final payment of Interest.
Early Redemption by Issuer
Yes, for tax reasons.
Early Redemption by Bondholder
Change of Control - In certain circumstance, where there is a Change of Control and a credit rating downgrade of the Bonds below a certain rating, then holders of the Bonds can “Put” the Bonds back to the Issuer prior to the Maturity Date.
Key benefits include:
- interest paid semi-annually in arrears;
- interest paid as 100% cash;
- interest is not deferrable nor are interest payments discretionary;
- rank equally with all other senior and unsecured creditors of the Issuer.
The value of an investment in GPT Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect GPT’s financial performance. The following risks may also affect an investment in GPT Bonds:
- Liquidity risk – an active secondary market in respect of the Bonds may never be established or may be illiquid and this would adversely affect the value at which an investor could sell the Bonds;
- Interest rate risk – the value of Fixed Rate Bonds may be adversely affected by movements in market interest rates;
- Structural risk – the Issuer has no material assets or sources of revenue except for claims against, and advances made to it by, other Group companies under intercompany loans and assets or liabilities under certain hedging arrangements;
- Obsolescence risk – relating to the industrial portfolio of the Group;
- Litigation risks – risks relating to litigation and regulatory actions;
- Default risk – if an event of default occurs under the Bonds, or the Issuer fails to perform any obligation in relation to the Bonds, such event or failure may impact on the value of an investment in the Bonds, the transferability of the Bonds and the ability of a holder to recover amounts due under the Bonds.
The Issuer and any Guarantor will procure that none of its Subsidiaries will, create or permit to subsist any Encumbrance on or over any of its assets except for any Permitted Encumbrance, unless either:
(a) all amounts payable by the Issuer under the MTNs are secured by an Encumbrance and ranking equally and rateably with the Financial Indebtedness secured by that Encumbrance; or
(b) such Encumbrance is approved by an Extraordinary Resolution.
Where a Permitted Encumbrance is, inter alia, any encumbrance that existed prior to the establishment of the debt programme, encumbrances that exist by operation of law, encumbrances in respect of assets that are acquired after the establishment of the debt programme, easements and like property interests that do not materially interfere with the use of that property, replacement encumbrances, encumbrances that are less than 180 days in duration, encumbrances over assets in respect of joint ventures, acquisitions or developments, flawed asset arrangements and encumbrances arising out of sale and leaseback arrangements.
(a) Gearing: Total Borrowings must not exceed 50% of Total Tangible Assets
(b) Interest Cover: EBIT: Gross Interest Expense is not to be less than 2.0 times.
Events of Default
Events of Default include:
- Failure to pay: Applicable with a cure period of 2 Business Days;
- Breach of Financial Covenants:
- Breach of Other Obligations: Applicable;
- Cross Default: Applicable, Threshold Amount is $15,000,000;
- Insolvency: Applicable;
- Winding up: Applicable to the General Property Trust or a Guarantor Trust;
- Creditors’ process: Applicable, Threshold Amount is $15,000,000;
- Unlawfulness: It is or becomes unlawful for the Issuer or any Guarantor to perform any of its obligations under the bond documentation;
- Repudiation: The Issuer or a Guarantor repudiates a bond document;
- Cessation of Payments: Applicable to the Issuer or the General Property Trust In respect of a material part of its business;
- Responsible Entity: GPT RE Ltd ceases to be the Responsible Entity of the Trust or any step is taken to appoint a new or additional Responsible Entity of the General Property Trust;
- Controller Appointed: Applicable;
- Variation of the Constitution: A Trust Constitution or Company Constitution is amended in a way which is likely to have a Material Adverse Effect.