Gold Coast-based residential property developer
Sunland Group (ASX: SDG) has become the latest company in the property industry to undertake a bond issue arranged by
FIIG Securities, today announcing a $40 million issue of 5-year fixed rate notes.
Sunland follows previous property sector issuers including Sydney-based property investment group 360 Capital, Brisbane-based developer Stockwell, Sydney-based developer Payce, and global infrastructure developer Plenary.
Sunland Group Managing Director, Sahba Abedian, said the note issue represented further strengthening and diversity across Sunland’s capital management initiatives, providing the Group with access to debt capital markets.
“Sunland’s premium development portfolio is the culmination of more than five years of strategic, counter-cyclical efforts and successful capital management initiatives,” Mr Abedian said.
“The note issue, together with Sunland’s existing banking arrangements, will assist in funding the Group’s current pipeline of land, residential housing and multi-storey developments and provide working capital for other opportunities Sunland may pursue in the future.”
“Sunland Group is one of Australia’s leading developers so its decision to issue a bond is a boost for this segment of the bond market and also highlights the attractiveness of bond issues for developers,” Mr Paton said.
“Bonds are a very effective way for developers to diversify their debt and raise capital without taking on expensive mezzanine finance or introducing a new equity partner.”
FIIG Securities CEO Mark Paton[/caption]Mr Paton said the process of issuing a bond could be surprisingly quick for quality issuers, with transactions only requiring six to eight weeks from start to finish.
The Sunland Group senior unsecured notes will pay an indicative interest rate of 7.55 per cent.
They will have a minimum initial investment of $50,000 at issue and will be distributed to new and existing FIIG Securities clients who qualify as sophisticated or professional investors.
Sunland's Grace on Coronation project in Brisbane[/caption]Sunland Group Limited was established in 1983 and over the past 32 years has become a diversified residential property development group focused on delivering urban land, residential housing and multi-storey developments along Australia’s east coast.
In 2015 Sunland is celebrating its 20th anniversary as a listed company on the Australian Securities Exchange and has a current market capitalisation of approximately $290 million. The company operates primarily in South-East Queensland, Sydney and Melbourne.
FIIG Securities Limited, which is licensed by the Australian Securities and Investments Commission (ASIC), is Australia’s largest specialist fixed-income dealer.