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Summerset Group Holdings Limited Fixed Rate Bond Offer Details

Summerset Group Holdings Limited (Summerset) has announced an offer of secured, unsubordinated bonds (Bonds). The Bonds have a term of 6 years, maturing in July 2023.

Please contact an Investment Adviser before 5:00pm on Tuesday 13 June 2017 if you are interested in participating in this offer.

This offer is being made in accordance with the Financial Markets Conduct Act 2013 and the Bonds are expected to be quoted on the NZX Debt Market (SUM010).

Please refer to the Product Disclosure Statement for full details of the Offer. A Terms Sheet is also available. You should read the Product Disclosure Statement carefully before applying for the Bonds, and understand the benefits and risks of investing in these Bonds.

Summary of Offer:

Issuer

Summerset Group Holdings Limited.

Guarantee

Consistent with the Guarantors for Summerset’s bank facilities.

Security

The Bondholders will share the benefit of the same security package as Summerset’s banks on a pro rata basis. This security is held by the Security Trustee.

The key securities that Summerset’s banks and Bondholders will have the benefit of are:

•   a second ranking mortgage over the land and permanent buildings of each Village Registered Company, which are the entities that operate Summerset’s registered retirement villages. This ranks behind a first ranking mortgage in favour of Public Trust (as the Statutory Supervisor of the relevant retirement village) securing amounts and obligations owing to village residents; and

•   a first ranking mortgage over land owned by other Summerset Group companies (described as Non-Village Registered Companies), being undeveloped land and land under development.

The Statutory Supervisor is entitled to the proceeds of security enforcement against all assets of the Village Registered Companies, in priority to Summerset’s banks and Bondholders. Summerset’s banks and the Bondholders share the remaining proceeds of security enforcement against Village Registered Company assets to which the Security Trustee is entitled on a pro rata basis.

See the Product Disclosure Statement for more details.

Financial Covenant

Summerset will ensure, on each Test Date, that the ratio of:

(a) Total Debt of the Summerset Group; to

(b) Property Value of the Summerset Group’s land and permanent buildings is less than or equal to 50%.

A reported breach of the LVR Covenant in respect of a Test Date will be an Event of Review. Summerset must then follow a process specified in the Master Trust Deed to attempt to remedy the breach. If the breach has not been remedied at the end of this process (maximum of 180 days), an Event of Default occurs.

Distribution stopper

Guarantors are not permitted to make any Distributions to non-Guarantors if an Event of Default or Event of Review is continuing.

See the Product Disclosure Statement for more details.

Offer Description

Fixed rate, guaranteed, secured, unsubordinated bonds (Bonds).

Offer Amount

$100 million.

Maturity Date

11 July 2023.

Interest Rate

On 14 June 2017 the interest rate for the Summerset Bonds was set at 4.78% per annum, being the higher of the minimum interest rate of 4.70% per annum and the 6 year swap rate plus the margin of 1.95% per annum.

Margin

1.95% per annum.

Interest Payments

Quarterly in arrear in equal amounts on 11 January, 11 April, 11 July and 11 October of each year up to and including the Maturity Date.

The first Interest Payment Date will be 11 October 2017.

Issuer Credit Rating

Unrated

Listing

NZX Debt Market (SUM010).

Rate Set Date

14 June 2017.

Offer Opens

15 June 2017.

Offer Closes

6 July 2017.

Issue Date

11 July 2017.

Minimum Application

$5,000 and in multiples of $1,000 thereafter.

Issue Price

$1.00 per Bond.

 

DISCLOSURE
Deutsche Craigs Limited, a wholly owned subsidiary of Craigs Investment Partners Limited, has been appointed as a Joint Lead Manager to the offer and will receive a fee for undertaking this role.

Craigs Investment Partners Limited will receive total fees of 1.00% on the Bonds that it distributes under the Offer. No brokerage will be payable by an investor.

Craigs Investment Partners Limited is a NZX Participant firm. A Disclosure Statement is available free of charge on request. Please visit craigsip.com for more information.

As the financial information detailed in this document does not constitute advice please contact an Investment Adviser should you wish to receive advice relevant to your personal circumstances.

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