The Centuria (ASX:CNI) share price was falling today as the company announced it’s launching a redeemable notes offering. Here’s the lowdown.
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Centuria Capital Group (ASX: CNI) shares were edging lower today after the company announced a listed notes offer to the market. By the market’s close, the Centuria share price had slumped 0.21% lower to $2.405.
Shares in the real estate investment trust (REIT) have had a subdued start to the year, losing more than 7% since 4 January. In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 1% over the same period.
Listed noted offering
The Centuria share price was on the slide today after the company announced the offering of listed notes. Under the issuance, the company aims to raise $100 million, with the ability to raise more or less as required.
The offer will comprise three separate tranches. The first of these will go to institutional investors selected by the company. The second two will comprise a broker firm offer and a security holder offer for all other shareholders. Notably, there is to be no general public offering of the notes.
Under the prospectus of the notes, which outlines the key points of the offering, Centuria advised that the notes will have a term of five years, expiring in April 2026. Also of interest is the face value of $100 per note and the variable, quarterly interest payments expected to be between 4.25% and 4.5% per annum.
What will the money be used for?
According to Centuria’s release, the proceeds will be used primarily to redeem a series of notes that are due to expire in April 2021. However, the funding will also “support Centuria Capital Group’s REIT co-investment programme, strategic acquisitions and accelerate the growth of its unlisted property funds division.”
About the Centuria share price
Centuria Capital is a large Australian manager of real estate and investment bonds. In total, the company manages $10.2 billion worth of assets. It predominantly holds property assets in the office, industrial and healthcare sectors, with 80% of its holdings in Australia.
Like most other ASX shares, the Centuria share price suffered significantly due to the global pandemic. This time last year, which was essentially the peak of the coronavirus-induced selloff, Centuria shares were swapping hands at $1.41. Since that time, the Centuria share price has rallied by around 70%.
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Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.