Argosy Property Limited · NZX:ARG
Argosy Property — Debt Investor Presentation (October 2019)
32 slides from Argosy Property's debt investor presentation, Oct 14, 2019
Slide 1: Green Bond Offer
Green Bond Offer 14 OCTOBER 2019
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Argosy Property Limited ("Argosy") in relation to the offer ("Offer") of senior secured fixed rate green bonds described in this presentation ("Green Bonds"). The offer of Green Bonds by Argosy is made in reliance upon the exclusion in clause 19 of s
Slide 3: Agenda
Agenda Offer Highlights 4 PRESENTED BY Argosy Overview 6 Portfolio Summary 8 Financials 14 Dave Fraser CFO Green Bond Offer 18 Key Terms & Dates 25 Appendices 28 Saatyesh Bhana Sustainability Asset Manager Note: Due to rounding, numbers presented in this presentation may not add up exactly to the to
Slide 4: Offer Highlights
Offer Highlights 4—
Slide 5: Offer Highlights
Offer Highlights Issuer Argosy Property Limited (“Argosy”) Instrument Senior secured fixed rate green bonds (“Green Bonds”) Issue Amount Up to NZ$75 million plus up to an additional NZ$25 million of oversubscriptions (at Argosy’s discretion) Tenor & Maturity Date 7 years, maturing 29 October 2026 Ar
Slide 6: Argosy Overview
Argosy Overview 6—
Slide 7: Create. Manage. Own.
Create. Manage. Own. Proactive delivery of sustainable growth. Manage all elements of the business to deliver the right outcomes for all our stakeholders. Own the right assets, with the right attributes in the right locations. 7—
Slide 8: Portfolio summary
Portfolio summary $1.67B 8— Argosy
Slide 9: Auckland and Wellington Focus
Auckland and Wellington Focus 43% Argosy’s property portfolio by location Of rent from industrial tenants 24% Of rent from Government tenants Note: As at 30 September 2019, Argosy has Note: Tenant data as at 31 March 2019. unconditionally sold the Albany Lifestyle Centre for $89.0 million with settl
Slide 10: Portfolio at a Glance
Portfolio at a Glance $1.67 BILLION1 @ 31 MARCH 2019 TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE BY SECTOR BY REGION BY ASSET MIX 3% 8% 18% 10% 25% 44% 38% 72% 82% Bands Bands Bands Auckland 65-75% Core 75-90% Industrial 40-50% Wellington 20-30% Value Add Office 30-40% - Region
Slide 11: Environmental Strategy
Environmental Strategy The impact of Argosy’s property investment business on the natural environment is an increasingly important consideration for investors, tenants and other stakeholders. Our environmental strategy reflects our ambition to create vibrant sustainable workplaces for our tenants. W
Slide 12: Green Projects Underway Include
Green Projects Underway Include 8-14 Willis Street, 107 Carlton Gore Road, Wellington Newmarket Target completion: April 2021 December 2019 NLA / WALT: 12,300sqm/15 years 6,100sqm/12 years Tenant: Dept. of Statistics NZ Housing Corporation of NZ Green Star rating: Targeting 6 Star Built Targeting mi
Slide 13: Green Projects Completed Include
Green Projects Completed Include 15-21 Stout Street, 82 Wyndham Street, Highgate Parkway, Wellington Auckland Auckland Completion: 2014 2018 2018 NLA / WALT: 21,000sqm/7.3yrs 6,000sqm/6.7yrs 10,600sqm/8.9yrs Green Star rating: 5 Star Built 5 Star Built 5 Star Built NABERSNZ rating: Targeting 5.5 Sta
Slide 14: Financials
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Slide 15: FY19 Full Year Highlights
FY19 Full Year Highlights 35.1% Total shareholder return 5.0% Net distributable income for 12 months increase 70.5m 100m $ annualised revaluation gain, $ successful Green Bond issue 4.3% above book value 6.94¢ 6.275¢ Net distributable income Full year dividend 15 —
Slide 16: 5 Year Operating Snapshot
5 Year Operating Snapshot Occupancy WALT (years) 100.0% 6.40 6.20 80.0% 6.00 5.80 60.0% 5.60 5.40 40.0% 5.20 20.0% 5.00 4.80 0.0% 4.60 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Net Tangible Assets Debt-to-total-assets $1.25 45.0% $1.20 40.0% $1.15 35.0% $1.10 30.0% $1.05 25.0% $1.00 20.0% $0
Slide 17: Funding & Interest Rate Management
Funding & Interest Rate Management In March 2019 Argosy issued FY19 FY18 $100m of 7 year senior secured fixed rate green bonds. The Weighted average interest rate1 4.75% 4.98% coupon was set at 4.00% per Interest Cover Ratio 3.2x 3.3x annum (“Existing Green Bonds”). % of fixed rate borrowings 53%
Slide 18: Green Bond Offer
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Slide 19: Security
Security The Guaranteeing Subsidiaries, being Argosy Property Management Limited, Argosy Property No.1 Limited and Argosy Property No.3 Limited, have granted an unconditional and unlimited guarantee of Argosy's obligations under the Green Bonds. The Green Bonds are secured by a general security inte
Slide 20: Covenants and Default
Covenants and Default Key covenants under the Trust Deed include: Borrowed Money Indebtedness1 is no more than 50% of the Secured Property Value; No distributions to be paid if an Event of Default has occurred and is continuing, or would occur as a result of making that distribution. Events of Defau
Slide 21: Loan to Value Ratio
Loan to Value Ratio As at 31 March 2019: The amount of Argosy’s Borrowed Money Indebtedness¹ was $596.2 million. The Secured Property Value 2 was $1,667.0 million. Loan to Value Ratio Secured Money Indebtedness¹ $596.2m Secured Property Value2 $1,667.0m Loan to Value Ratio (%) 35.8% 1. Borrowed Mone
Slide 22: Adjusted Debt Profile & Tenor
Adjusted Debt Profile & Tenor Increases funding diversification from 14% to 29% of total debt from non-bank sources after issuance. Repaid bank debt Extends weighted average funding tenor from 3.6 years to 4.3 years from expected issue date of 29 October 2019, and assumes $100 million (including
Slide 23: Green Bond Framework
Green Bond Framework Use of proceeds The proceeds of the Offer are intended to be used to refinance existing bank debt that supports Green Assets External review EY has issued a limited assurance report to Argosy in relation to the proposed use of funds raised through the issuance of the Green Bonds
Slide 24: Green Assets
Green Assets Value of Existing Green Assets Asset Value1 Address Use Current NABERSNZ Rating Green Star Rating (NZDm) 143 Lambton Quay Office 4 Stars Energy Whole Building 5 Star Office Built $29.3 15-21 Stout Street Office Targeting 5.5 Stars Energy Whole Building3 5 Star Office Built $111.0 82 Wyn
Slide 25: Key Terms & Dates
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Slide 26: Key Offer Terms
Key Offer Terms Summary Detail Issuer Argosy Property Limited Instrument Senior secured fixed rate green bonds Offer amount Up to NZ$75 million plus up to an additional NZ$25 million of oversubscriptions (at Argosy’s discretion) Use of proceeds The proceeds of the Offer are intended to be used to re
Slide 27: Key Offer Dates
Key Offer Dates Key Event Date Offer opens and announcement of minimum Interest Rate and indicative Monday, 14 October 2019 Margin range. Firm bids due and Offer closes Friday, 18 October 2019 (12pm) Issue Date Tuesday, 29 October 2019 Expected date of initial quotation and trading on the NZX Debt M
Slide 28: Appendices
Appendices 28 —
Slide 29: Board of Directors
Board of Directors Mike Smith - Chairman Peter Brook - Director Extensive management and Extensive management and corporate governance experience governance experience in New in New Zealand. Zealand. Previous directorships include Lion Trustee of Melanesian Mission Trust Nathan, Fonterra, Auckland B
Slide 30: Board of Directors
Board of Directors Chris Gudgeon - Director Jeff Morrison - Director Stuart McLauchlan - Director Involved in property, investment 41 years as a property lawyer, More than 25 years experience and development for more than 29 of these as a partner at across corporate New Zealand. 25 years in New Zeal
Slide 31: Board of Directors
Board of Directors Mike Pohio - Director Rachel Winder - Director 25 years of experience across Rachel has over 20 years of property corporate New Zealand. sector experience across a variety of Previously CEO of Tainui Group roles including strategy, portfolio Holdings (TGH) and currently management
Slide 32: Management
Management Peter Mence - CEO Dave Fraser – CFO An engineer by background, Peter Has over 29 years in senior financial has 36 years of experience in the and general management roles property industry working with both in New Zealand and overseas, Progressive Enterprises, Challenge including a period
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