Clarification of Indicative Terms Sheet: Base Rate

NZX and media
announcement
—
20 September 2018


CLARIFICATION OF INDICATIVE TERMS
SHEET: BASE RATE

Further to the announcement by Property for Industry Limited (PFI) on 17 September 2018 in relation to
the offer of 7-year senior secured fixed rate bonds to New Zealand institutional and retail investors, PFI
has released an updated indicative terms sheet clarifying that the Base Rate (as defined in that terms
sheet) is to be expressed on a quarterly basis given the interest payment dates are quarterly in arrear.

A copy of the updated indicative terms sheet is attached to this announcement.

For further information please contact:

Arranger and Joint Lead Manager:

Phone: 0800 942 822

Joint Lead Managers:




Phone: 0800 226 263
Phone: 0800 367 227

ENDS










ABOUT PFI & CONTACT

PFI is an NZX listed property vehicle specialising in industrial property. PFI’s nationwide portfolio of 93 properties is leased to
146 tenants.

For further information please contact:

SIMON WOODHAMS CRAIG PEIRCE
General Manager Chief Financial Officer and Company Secretary
--- ---
Phone: +64 9 303 9652 Phone: +64 9 303 9651
Email: woodhams@pfi.co.nz Email: peirce@pfi.co.nz
---
Property for Industry Limited
Shed 24, Prince’s Wharf, 147 Quay Street, Auckland 1010
PO Box 1147, Shortland Street, Auckland 1140
—
www.propertyforindustry.co.nz


Attachments
Updated indicative terms sheet

---

Property
For
Industry
Limited
JOINT LEAD
MANAGERS:
UP TO $75,000,000 7 YEAR SENIOR SECURED FIXED RATE BONDS
(PLUS UP TO $25,000,000 OVERSUBSCRIPTIONS)
WWW.PFIBONDOFFER.CO.NZ
DATED: 20 SEPTEMBER 2018
IND I CAT I V E
TERMS
SHEET

PROPERTY FOR INDUSTRY LIMITED

INDICATIVE TERMS SHEET

2
INDICATIVE TERMS SHEET .
dated 20 September 2018
Senior Secured Fixed Rate Bonds due 1 October 2025
This terms sheet (Terms Sheet) sets out the key terms of the offer by Property for Industry Limited (PFI) of up to $75,000,000, with
the ability to accept oversubscriptions of up to $25,000,000 at PFI’s discretion, of seven-year senior secured fixed-rate bonds
maturing on 1 October 2025 (Bonds) under its bond master trust deed dated 2 November 2017 (as amended from time to time)
(Trust Deed) as modified and supplemented by the supplemental deed dated 17 September 2018 entered into between PFI and
Public Trust (Supervisor) (together with the Trust Deed, Bond Trust Documents).
Unless the context otherwise requires, capitalised terms used in this Terms Sheet have the same meaning given to them in the Bond
Trust Documents.
Important notice
The offer of debt securities by PFI is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets
Conduct Act 2013 (FMCA).
The offer contained in this Terms Sheet is an offer of bonds that have identical rights, privileges, limitations and conditions
(except for the interest rate and maturity date) as PFI’s $100,000,000 senior secured fixed-rate bonds maturing on 28 November
2024 (which have an interest rate of 4.59% p.a.), which are currently quoted on the NZX Debt Market under the ticker code PFI010
(PFI010 Bonds).
The Bonds are of the same class as the PFI010 Bonds for the purposes of the FMCA and the Financial Markets Conduct
Regulations 2014.
PFI is subject to a disclosure obligation that requires it to notify certain material information to NZX Limited (NZX) for the
purpose of that information being made available to participants in the market and that information can be found by visiting
www.nzx.com/companies/PFI.
The PFI010 Bonds are the only debt securities of PFI that are currently quoted in the same class as the Bonds.
Investors should look to the market price of the PFI010 Bonds referred to above to find out how the market assesses the returns
and risk premium for those bonds. When comparing the yield of two debt securities, it is important to consider all relevant factors
(including the credit rating (if any), maturity and the other terms of the relevant debt securities).
Issuer
Property for Industry Limited.
Description
Senior secured fixed rate bonds.
Opening Date
Monday, 17 September, 2018.
Closing Date
Friday, 21 September, 2018.
Rate Set Date
Friday, 21 September, 2018.
Issue Date
Monday, 1 October 2018.
Maturity Date
Wednesday, 1 October 2025.
Purpose
The proceeds of the offer are expected to be used to repay existing bank debt.
Offer Amount
Up to $75,000,000 (with the ability to accept oversubscriptions of up to an additional $25,000,000
at PFI’s discretion).
Guarantee and
Security
P.F.I. Property No. 1 (PFI Property) has guaranteed the payments due on the Bonds.
The Bonds are secured by first ranking mortgages (the Mortgages) granted by PFI Property as
Guarantor over various properties (the Mortgaged Properties).
The Security Trustee holds the Mortgages for all creditors entitled to their benefit, which
currently includes (in addition to the Supervisor and the Holders) the PFI Group’s banks and
their facility agent, on an equal ranking basis.

PROPERTY FOR INDUSTRY LIMITED

INDICATIVE TERMS SHEET

3
Financial Covenant
PFI agrees to ensure that the total principal amount of all outstanding borrowed money secured
by the Mortgages is not more than 50% of the total value of all Mortgaged Properties (the Loan
to Value Ratio).
A breach of the Loan to Value Ratio which is not remedied within (approximately) 13 months of
that breach being disclosed to the Supervisor in a director’s report will be an Event of Default
under the Bond Trust Documents.
Distribution Stopper
PFI is not permitted to make any distribution if an Event of Default is continuing or if it would
result in an Event of Default. Full details of the Events of Default are set out in the Bond Trust
Documents.
No Credit Rating
The Bonds will not be rated.
Issue Price
$1.00 per Bond, being the Principal Amount of each Bond.
Early Repayment
Holders have no rights to require PFI to redeem the Bonds early except through the Supervisor in
the case of an Event of Default (as defined in the Bond Trust Documents). PFI does not have the
right to redeem the Bonds early.
Interest Rate
The sum of the Base Rate plus the Issue Margin which may be above or below the Indicative
Issue Margin, subject to a minimum Interest Rate of 4.15% per annum.
The Interest Rate will be announced by PFI via NZX on or about the Rate Set Date.
Indicative Issue
Margin
1.60 to 1.70% per annum.
Issue Margin
The Issue Margin (which may be above or below the Indicative Issue Margin range mentioned
above), will be determined by PFI (in consultation with the Joint Lead Managers) following a
bookbuild process and announced by PFI via NZX on or about the Rate Set Date.
Base Rate
The mid-market rate for an interest rate swap of a term matching the period from the Issue Date to
the Maturity Date as calculated by the Arranger in consultation with PFI, according to market
convention, with reference to Bloomberg page ‘ICNZ4’ (or any successor page) on the Rate Set Date
and expressed on a quarterly basis (rounded to 2 decimal places, if necessary, with 0.005 being
rounded up).
Interest Payments
Quarterly in arrear in equal payments.
Interest Payment
Dates
1 January, 1 April, 1 July and 1 October each year (or if that day is not a Business Day, the next
Business Day) until and including the Maturity Date. The first Interest Payment Date will
be 1 January 2019 but as that date is a public holiday, the actual payment will be made on
3 January 2019.
Record Date
5.00pm on the date that is 10 days before the relevant Interest Payment Date or, if that is not a
Business Day, the immediately preceding Business Day.
Business Days
Auckland and Wellington.
Brokerage
0.50% brokerage plus 0.25% on firm allocations paid by PFI.
ISIN
NZPFIDT020C1.
NZX Debt Market
Quotation
Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market
and all the requirements of NZX relating thereto that can be complied with on or before the
distribution of this Terms Sheet have been duly complied with. However, NZX accepts no
responsibility for any statement in this Terms Sheet. NZX is a licensed market operator, and the
NZX Debt Market is a licensed market under the FMCA.
NZX ticker code PFI020 has been reserved for the Bonds.
Minimum Application
Amount and
Denominations
$5,000 and multiples of $1,000 thereafter.

PROPERTY FOR INDUSTRY LIMITED

INDICATIVE TERMS SHEET

4
Transfer Restrictions
Holders are entitled to sell or transfer their Bonds at any time subject to the terms of the Bond
Trust Documents and applicable securities laws and regulations. PFI may decline to register a
transfer of the Bonds for the reasons set out in the Bond Trust Documents.
No transfer may be made if the transfer would result in the transferor or the transferee holding
or continuing to hold Bonds with a principal amount of less than $5,000 (other than zero) or not
in multiples of $1,000.
NZX has approved these restrictions on the transfer of the Bonds.
Governing law
New Zealand.
NZX Waiver
NZX has granted PFI a waiver from NZX Listing Rule 7.11.1 to allow allotment of the Bonds to
occur within six Business Days of the Closing Date.
Who May Apply &
How to Apply
All of the Bonds, including oversubscriptions, will be reserved for clients of the Joint Lead
Managers, institutional investors and other Primary Market Participants invited to participate
in the bookbuild. There will be no public pool for the Bonds.
Retail investors should contact any Joint Lead Manager, their financial adviser or any Primary
Market Participant for details on how they may acquire Bonds. You can find a Primary Market
Participant by visiting www.nzx.com/investing/find_a_participant.
Each investor’s financial adviser will be able to advise them as to what arrangements will need to
be put in place for the investors to trade the Bonds including obtaining a common shareholder
number (CSN), an authorisation code (FIN) and opening an account with a primary market
participant, as well as the costs and timeframes for putting such arrangements in place.
Arranger and
Organising Participant
Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch)
(Westpac).
Joint Lead Managers
Deutsche Craigs Limited, Forsyth Barr Limited and Westpac.
Supervisor
Public Trust.
Security Trustee
New Zealand Permanent Trustees Limited.
Securities Registrar
Computershare Investor Services Limited.
Selling Restrictions
PFI does not intend that the Bonds be offered for sale, and no action has been taken or will be
taken to permit a public offering of Bonds, in any jurisdiction other than New Zealand. Bonds
may only be offered for sale or sold in conformity with all applicable laws and regulations in any
jurisdiction in which they are offered, sold or delivered. This terms sheet may not be published,
delivered or distributed in or from any country other than New Zealand.
By subscribing for or otherwise acquiring any Bonds, each Holder agrees to indemnify, among
others, PFI, the Supervisor and the Joint Lead Managers for any loss suffered as a result of any
breach by the Holder of these selling restrictions.
Any internet site addresses provided in this Terms Sheet are for reference only and, except as expressly stated otherwise, the
content of any such internet site is not incorporated by reference into, and does not form part of, this Terms Sheet.
Copies of the Bond Trust Documents are available on the website (managed by PFI) for the offer of the Bonds
www.pfibondoffer.co.nz.
Investors should seek qualified, independent financial and taxation advice before deciding to invest. Investors will be personally
responsible for all tax return filing obligations in respect of their investment in the Bonds, compliance with the financial
arrangements rules (if applicable) and payment of provisional or terminal tax (if required) on interest derived.
For further information regarding PFI, visit www.nzx.com/companies/PFI.

PROPERTY FOR INDUSTRY LIMITED

INDICATIVE TERMS SHEET

5
ADDRESS DETAILS
Issuer
Property for Industry Limited
Shed 24, Prince’s Wharf
147 Quay Street
Auckland 1010
Supervisor
Public Trust
Level 9, 34 Shortland Street
Auckland 1010
Security Trustee
New Zealand Permanent Trustees Limited
Level 9, 34 Shortland Street
Securities Registrar
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
Telephone: 09 488 8777
Email: pfi@computershare.co.nz
Arranger and Organising Participant
Westpac Banking Corporation (ABN 33 007 457 141)
(acting through its New Zealand branch)
Westpac on Takutai Square
Level 8, 16 Takutai Square
Auckland 1010
0800 942 822
Joint Lead Managers
Deutsche Craigs Limited
Level 36, Vero Centre
48 Shortland Street
Auckland 1010
0800 226 263
Forsyth Barr Limited
Level 23, Lumley Centre
88 Shortland Street
Auckland 1010
0800 367 227
Westpac Banking Corporation (ABN 33 007 457 141)
(acting through its New Zealand branch)
Westpac on Takutai Square
Level 8, 16 Takutai Square
Auckland 1010
0800 942 822

PROPERTY FOR INDUSTRY LIMITED

INDICATIVE TERMS SHEET

6
The dates set out in this Terms Sheet are indicative only and are subject to change. PFI may, in its absolute discretion and without
notice, vary the timetable (including by opening or closing the offer described in this Terms Sheet early, accepting late applications
and extending the Closing Date). PFI reserves the right to cancel the offer described in this Terms Sheet and the issue of the
Bonds, in which case all application monies received will be refunded (without interest) as soon as practicable.
F R IDAY
21 SEPTEMBER
2018
M O N DAY
1 OCTOBER
2018
T U E S DAY
2 OCTOBER
2018
M O N DAY
17 SEPTEMBER
2018
WEDNESDAY
1 OCTOBER
2025
F R IDAY
21 SEPTEMBER
2018
BOOKBUILD DATE
ISSUE DATEEXPECTED QUOTATION
OPENING DATE
MATURITY DATE
CLOSING DATE
IMPORTANT DATES.
F R IDAY
21 SEPTEMBER
2018
RATE SET DATE