AMP NZ Office Trust successfully completes $70 million unit placementApril 19, 2007 New Zealand’s largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO) has successfully completed its $70 million institutional unit placement. Announced yesterday, the placement is a value-enhancing capital management initiative which will increase after-tax earnings in the current year and beyond by allowing ANZO to retire some comparatively-expensive debt. ANZO executive manager Rob Lang said 52,238,806 new units will be issued at a price of $1.34. New units have been allocated to a broad range of New Zealand-based investors and a number of offshore investors. He was pleased with the interest expressed in the offer and said there was excess demand, which required some scaling-down. Settlement of the placement and issue of the new units is expected to take place next week (Tuesday April 24). The new units will rank equally in all respects with existing ANZO units and will be entitled to ANZO's third-quarter distribution of 1.99 cents per unit, to be paid next month. The placement was not underwritten and was managed by First NZ Capital and Macquarie Securities (New Zealand) Limited. A unit-holder meeting will be scheduled to be held in Wellington in May to ratify this placement and ANZO's previous placement in December last year. He said no unit purchase plan (UPP) could be implemented at this time due to legislative constraints, which in practice limit UPPs to one every twelve months. ANZO completed a UPP in February this year. Mr Lang said this week’s placement has given ANZO a stronger balance sheet and increased capacity for future growth. ANZO's gearing (excluding the mandatory convertible notes, which are due to convert on 30 June 2007) will be reduced from approximately 28 percent to approximately 23.3 percent, providing approximately $320 million of bank debt capacity for further investment (after allowing for the redevelopment of Auckland’s 21 Queen Street). ANZO's interest rate exposure will also be reduced significantly, providing better certainty around future earnings and investor returns. Following the placement and settlement of 21 Queen Street, 85 percent of ANZO's bank debt will be hedged for an average of five years. The placement is expected to improve ANZO's free float, market capitalisation, trading liquidity and position in the NZX50 index while at the same time further improving the prospects of inclusion in other major international stock indices. ANZO is managed by AMP Multiplex Management Limited.
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