Lend Lease Finance Limited
Lend Lease Corporation Limited, Lend Lease Responsible Entity Limited as responsible entity of the Lend Lease Trust, Lend Lease Europe Finance plc, Lend Lease (US) Capital Inc
Lend Lease Medium Term Note Program, Information Memorandum dated 23 April 2013
Dated 8 May 2013.
Nature of the bonds
The bonds are direct, unsecured and unsubordinated obligations of the Issuer and rank pari passu amongst themselves and rank equally with all other unsecured and unsubordinated obligations of the Issuer, other than those mandatorily preferred by law.
Interest Rate and Interest Payment Dates
5.50% per annum, payable semi-annually (in two coupons of 2.75%) in arrears, on 13 May and 13 November in each year, including the Maturity Date.
Repayment at the maturity date
On the Maturity Date, Bondholders are scheduled to receive the Face Value and the final payment of Interest for the last Interest Period.
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 Lend Lease Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Lend Lease’s financial performance. The following risks may also affect an investment in Lend Lease 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
- Development risk – Lend Lease may face delays in gaining approvals for and/or completing developments which may adversely affect the financial performance.
- Currency risk – Lend Lease’s financial results may be negatively affected by currency exchange rate fluctuations
- 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
- 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.
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.
(a) Consolidated Total Net Borrowings do not exceed 50% of Total Tangible Assets
(b) Interest Cover Ratio (i.e. Consolidated EBITDA/ Net Finance Charges) is not less than 2.5 times
Events of Default
Events of Default include:
- Failure to Pay: Applicable with a cure of 3 Business Days;
- Breach of Financial Covenants: The Issuer or any Guarantor breaches any financial covenant;
- Negative Pledge: Breach of negative pledge by the Issuer or any Guarantor
- Breach of Other Obligations: Applicable;
- Cross Default: Applicable, with a Threshold Amount of A$50,000,000;
- Enforcement or Attachment: Applicable, with a Threshold Amount of A$50,000,000;
- Suspension of Payment: The Issuer or any Guarantor or a Material Subsidiary suspends payment of its debts generally;
- Insolvency: Applicable in respect of the Issuer, any Guarantor or a Material Subsidiary;
- Scheme of Arrangement/Compromise: Applicable in respect of the Issuer, any Subsidiary or a Material Subsidiary except for the purposes of a solvent reconstruction or amalgamation;
- Change of ownership: The Issuer or any Guarantor (other than a Parent) is not directly or indirectly a wholly owned Subsidiary of a Parent;
- Trust: Any resolution is passed to dissolve, re-settle or terminate the Lend Lease Trust, or the dissolution, re-settlement or termination of the Lend Lease Trust commences;
- Responsible Entity: An order is made in any court for the removal of Lend Lease RE as responsible entity of the Lend Lease Trust or the appointment of a temporary responsible entity to the Lend Lease Trust, unless the replacement or temporary responsible entity is a Subsidiary of a Parent.