Client News

Stockwell closes FIIG-originated bond issue oversubscribed

StockwellQueensland diversified property group W.A Stockwell has closed its $35 million bond issue oversubscribed following a strong investor response to the offer, sole lead arranger FIIG Securities has announced. The 6-year senior secured amortising note issue will pay a fixed rate of interest of 7.75% pa. FIIG CEO Mark Paton said the success of the Stockwell issue confirmed the market appetite, especially among wholesale investors, for credit exposure to quality Australian companies. “The strong reception for the Stockwell issue once again illustrates that Australian private investors and SMSFs have unmet demand for fixed income investments offering good income streams,” Mr Paton said. “When you combine this with the many benefits that a bond issue offers a company, such as debt diversification and longer duration than they can get elsewhere, it is easy to see why the market is rapidly growing.” “Bond issues are an ideal source of funding for property companies such as Stockwell because they resemble corporate lending – which considers the company’s entire business – rather than the more restrictive bank lending which requires security against specific property assets.” “To successfully build a diversified property business you need just as much flexibility as you would in any other industry. A bond issue can provide that missing flexibility because we take a traditional corporate lending approach, considering the credit risk of the entire business with a focus on its cash flows rather than just specific hard assets,” Mr Paton said. The notes were distributed to new and existing FIIG Securities’ clients, including SMSFs, who qualified as sophisticated or professional investors. The Stockwell issue is the fourth that FIIG has sole-arranged for a company in the property and infrastructure sector, following successful issues by ASX-listed property developer Payce Consolidated, infrastructure operator Plenary Group, and ASX-listed property funds manager 360 Capital. W.A. Stockwell Pty Ltd is the parent company of the Stockwell Property Group, a Queensland-based diversified property group with over 60 years of experience in property development, property investment and design & construction. FIIG Securities Limited, which is licensed by the Australian Securities and Investments Commission (ASIC), is Australia’s largest specialist fixed-income dealer and has arranged 19 bond issues for a wide variety of Australian and New Zealand companies totalling $955 million over the last 3 years. FIIG has more than $11 billion in term deposits and corporate bonds under advice in its short-term money market, bonds and custody business. The company has offices in Sydney, Melbourne, Brisbane and Perth.