RE1 Limited as trustee and responsible entity of Westfield Retail Trust 1
RE1 Limited as trustee and responsible entity of Westfield Retail Trust 1 RE2 Limited as trustee and responsible entity of Westfield Retail Trust 2 RE (NZ) Finance Limited
Westfield Retail Trust Debt Securities Issuance Programme dated 11 April 2011
Dated 19 October 2012
Nature of the bonds
The Bonds and Guarantee are unsubordinated and unsecured obligations of the Issuer and of the Guarantors, respectively, and will rank at least pari passu with all other unsubordinated and unsecured obligations of the Issuer and each Guarantor, other than those mandatorily preferred by law.
5.00% per annum, payable semi-annually (in two coupons of 2.50%) in arrears on 23 April and 23 October 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 Scentre Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Scentre’s financial performance. The following risks may also affect an investment in Scentre 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;
- Currency risk – Scentre’s financial results may be negatively affected by currency exchange rate fluctuations;
- 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; In assessing potential default risk, a bondholder should consider the periodic and continuous disclosures made by the Issuer.
The Issuer will not create any Encumbrance (except a Permitted Encumbrance) over its assets or revenues which would result in Secured Debt exceeding 45% of Total Debt unless the Bonds are secured equally. A Permitted Encumbrance includes one arising by law, and in the ordinary course of business.
Early redemption by issuer
The Issuer can redeem the Bonds at any time during the period 90 days prior to the Maturity Date. In certain circumstances, the Issuer can redeem the Notes early for tax reasons.
(a) Net Debt not to exceed 65% of Net Assets
(b) Secured Debt not to exceed 45% of Total Assets
(c) EBITDA: Interest Expense Ratio will be at least 1.5:1.00
(d) Unencumbered Assets to Unsecured Debt to be at least 125%
Events of default
Events of Default include:
- Failure to Pay: Applicable, with a cure period of 3 Business Days for principal, premium or interest and a cure period of 10 Business Days for any other amount;
- Breach of Other obligations: Applicable;
- Cross default: Applicable, with a Threshold Amount of A$50,000,000
- Insolvency: Applicable to the Issuer, a Guarantor or a material subsidiary;
- Cessation of Business: Applicable to the Issuer, a Guarantor or a material subsidiary;
- Obligations Unenforceable: Applicable.