Stockland Trust Management Limited in its capacity as Responsible Entity for the Stockland Trust.
Stockland Corporation Limited
Commercial Paper and Medium Term Note Program dated 20 February 2003 and subsequent amendments
Dated 23 November 2015
Nature of the Bonds
The bonds are direct, unsubordinated and unsecured obligations of the Issuer and rank without preference or priority among themselves and at least equally with all other present and future unsecured and unsubordinated obligations of the Issuer except those liabilities mandatorily preferred by law.
Interest Rate and Interest Payment Dates
4.50% per annum, payable semi-annually (in two coupons of 2.25%) in arrears, on 23 May and 23 November in each year, including the Maturity Date.
23 November 2015
23 November 2022
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, where the Issuer is required to pay an additional amount as a result of a withholding imposed by the Commonwealth of Australia or a political subdivision within Australia.
- Yes, at any time after 23 August 2022 on the giving at least 30 days and not more than 60 days’ notice. Holders will receive principal and accrued interest up to, but not including, the early maturity date.
- Yes, at any time prior to 23 August 2022 on the giving of at least 30 days’ and not more than 60 days’ notice. Holders will receive the greater of:
a) The outstanding principal amount and accrued interest up to, but not including, the early maturity date; and
b) The present value of the principal amount at the early maturity date plus the present value of all interest payments that would otherwise have been payable on the notes from the early maturity date to the scheduled maturity date. The present value is calculated by reference to a prevailing benchmark rate that is used for calculating the price of corporate bonds generally, plus a margin. That is, the value is discounted by a benchmark rate plus a margin.
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.
The value of an investment in Stockland Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Stockland’s financial performance. The following risks may also affect an investment in Stockland Bonds:
- Stockland’s financial performance and rating: a change in Stockland’s financial condition or rating may impact on the market value and the transferability of the 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;
- Early Call Risk – the return on the bonds may be reduced if the Issuer exercises their Early Redemption right;
- 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.
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.
It will be an Event of Default in respect of the Bonds if any Security Interest other than a Permitted Security Interest exists over any property which the Issuer holds in its capacity as responsible entity of the Scheme.
Permitted Security Interests comprise:
(a) any Security Interest arising by operation of law;
(b) certain Security Interest over property acquired;
(c) any Security Interest already in existence;
(d) certain Security Interests granted in connection with retirement villages; and
(d) any Security Interest (other than (a) to (d) above) securing indebtedness in an aggregate principal amount which does not exceed a total amount equal to 15% of the value of Consolidated Total Equity of the Stockland Group.
a) Total Liabilities must not exceed 45% of Total Tangible Assets.
b) EBIT: Finance Charges Ratio will be at least 2.0:1.00.
Events of Default
Events of Default include:
- Failure to Pay: Applicable, with a cure period of 2 days;
- Breach of Other Obligations: Applicable, with cure period of 14 days;
- Cross Default: Applicable, Threshold Amount is $10,000,000;
- Judgment: If a judgment is made against the assets of the Trust and it is not set aside within 15 days, Threshold Amount is $10,000,000;
- Enforcement or Attachment: Applicable, Threshold Amount is $5,000,000;
- Responsible Entity events impacting on the solvency of the Issuer in its capacity as responsible entity of the Scheme or in relation to the Issuer in its personal capacity;
- Controller Appointed: Applicable, Threshold Amount is $5,000,000;
- Scheme: certain events in relation to the Scheme, including material amendment of the Constitution;
- Obligations Unenforceable: Applicable.
- Breach of Financial Covenants.
Public Offer Test Compliant
If a payment on the bonds is subject to a withholding tax under FATCA, no additional amounts will be paid by the Issuer, and a holder of the bonds will receive less than the amount the holder would have otherwise received.