New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Investore (IPL) Bond offer and NZ$100m of potential acquisitions</h2>
IPL has announced that it is making an offer of up to NZ$75m (plus over subscriptions of NZ$50m) of 7-year senior secured fixed rate bonds. If successful the bond issue would 1) lift debt diversification to 50% of funding from non-bank, 2) extend debt tenor to 4.8 years with the cancellation of bank facilities expiring in FY22 (for more details on the bond see attached note).
Also, IPL announced it is currently considering portfolio opportunities totalling c.NZ$100m (an acquisition plus potential redevelopments). We currently assume NZ$50m of acquisitions in FY21 (at 5.5% yield on cost), assuming NZ$100m would lift our FY22E AFFO c.3% all else equal. If these portfolio opportunities proceed they are able to be funded within current debt facility limits and would lift gearing to 37.4% and leave NZ$48m of available debt capacity. Assuming the bond issue is successful and the FY22 facility cancelled as planned then debt capacity headroom lifts to NZ$74m; gearing would be 42% if all capacity is utilised and well within IPL’s stated maximum gearing of 48% and covenants of 65%.
IPL also reiterated its expected COVID impact of a NZ$1-2m reduction in gross rent receivable for FY21 (ForBarr NZ$1m). This does assume Alert Level 3 or 4 restrictions are not in place for an extended period of time during the balance of FY21.
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.0.1&amp;permmsgid=msg-f:1675239657851512908&amp;th=173fa597cfe2e84c&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ94gK7yGjUpStBB6MNYGAFgKzVI6AKIPnY2R0nR4zkfHrtPagv-oGc7UXcv1ZzMss-n6PuZ1UPTbSsZOWQJtMdzUmrzANjm3jPU7Lg8E3VC0x-VG5kc8ZqJhaI&amp;disp=emb" class="editor-image img-responsive"></figure>
P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Investore (IPL) Bond offer and NZ$100m of potential acquisitions
IPL has announced that it is making an offer of up to NZ$75m (plus over subscriptions of NZ$50m) of 7-year senior secured fixed rate bonds. If successful the bond issue would 1) lift debt diversification to 50% of funding from non-bank, 2) extend debt tenor to 4.8 years with the cancellation of bank facilities expiring in FY22 (for more details on the bond see attached note).
Also, IPL announced it is currently considering portfolio opportunities totalling c.NZ$100m (an acquisition plus potential redevelopments). We currently assume NZ$50m of acquisitions in FY21 (at 5.5% yield on cost), assuming NZ$100m would lift our FY22E AFFO c.3% all else equal. If these portfolio opportunities proceed they are able to be funded within current debt facility limits and would lift gearing to 37.4% and leave NZ$48m of available debt capacity. Assuming the bond issue is successful and the FY22 facility cancelled as planned then debt capacity headroom lifts to NZ$74m; gearing would be 42% if all capacity is utilised and well within IPL’s stated maximum gearing of 48% and covenants of 65%.
IPL also reiterated its expected COVID impact of a NZ$1-2m reduction in gross rent receivable for FY21 (ForBarr NZ$1m). This does assume Alert Level 3 or 4 restrictions are not in place for an extended period of time during the balance of FY21.
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities

P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Investore (IPL): Bond Offer and NZ$100m of Potential Acquisitions

Investore Property

Investore (IPL): Bond Offer and NZ$100m of Potential Acquisitions