Argosy Announces Green Bond Offer
MARKET RELEASE
Argosy Property Limited (‘Argosy’) is making an offer (‘Offer’) of up to $75 million (with the
ability to accept an additional $25 million in oversubscriptions at Argosy’s discretion) of senior
secured fixed rate 7 year green bonds to New Zealand retail and institutional investors (‘Green
Bonds’).
The proceeds of the Green Bonds are intended to be used to refinance existing bank debt that
supports Green Assets. Green Assets are office, industrial or retail buildings, including
upgrades, that meet certain criteria established by Argosy in its Green Bond Framework as
described in the product disclosure statement for the Offer dated 20 February 2019 (‘PDS’).
The margin and interest rate will be set following a bookbuild process on 6 March 2019 and
will be announced via NZX. The Offer is expected to open on 7 March 2019. An indicative
margin range above the 7 year swap rate and a minimum interest rate for the Green Bonds is
expected to be announced on or about 27 February 2019.
The Offer consists of:
• the Priority Offer of up to NZ$10 million, which is only open to New Zealand retail
shareholders of Argosy and is expected to close on 20 March 2019; and
• the General Offer of up to NZ$65 million (plus up to NZ$25 million of oversubscriptions
at Argosy's discretion), which is open to all investors resident in New Zealand and is
expected to close on 22 March 2019. There will be no public pool for the Green Bonds
offered under the General Offer.
Argosy has appointed ANZ Bank New Zealand Limited (‘ANZ’) as Arranger and ANZ, together
with Bank of New Zealand, First NZ Capital Securities Limited and Forsyth Barr Limited as
Joint Lead Managers in relation to the Offer.
Details of the Offer are contained in the PDS which was lodged today. A copy of the PDS is
attached and is also available at www.argosy.co.nz/greenbondoffer.
Enquiries
Peter Mence
Chief Executive Officer
Argosy Property Limited
Telephone: 09 304 3411
Email: pmence@argosy.co.nz
Dave Fraser
Chief Financial Officer
Argosy Property Limited
Telephone: 09 304 3469
Email: dfraser@argosy.co.nz
Stephen Freundlich
Head of Investor Relations
Argosy Property Limited
Telephone: 09 304 3426
Email: sfreundlich@argosy.co.nz
20 February
2019
ARGOSY ANNOUNCES GREEN BOND OFFER
Investors can register their interest in the Offer by contacting a Joint Lead Manager as
detailed below, or their regular financial adviser. Indications of interest will not involve an
obligation or commitment to acquire the Green Bonds. The Green Bonds are expected to be
quoted on the NZX Debt Market.
– ENDS –
Enquiries
Peter Mence
Chief Executive Officer
Argosy Property Limited
Telephone: 09 304 3411
Email: pmence@argosy.co.nz
Dave Fraser
Chief Financial Officer
Argosy Property Limited
Telephone: 09 304 3469
Email: dfraser@argosy.co.nz
Stephen Freundlich
Head of Investor Relations
Argosy Property Limited
Telephone: 09 304 3426
Email: sfreundlich@argosy.co.nz
---
Product
Disclosure
Statement
for an offer of senior secured fixed rate 7 year green bonds
by Argosy Property Limited (Argosy)
Date: 20 February 2019
This document gives you important information about this investment to help you
decide whether you want to invest. There is other useful information about this offer on
www.disclose-register.companiesoffice.govt.nz. Argosy Property Limited has prepared
this document in accordance with the Financial Markets Conduct Act 2013. You can
also seek advice from a financial adviser to help you to make an investment decision.
JOINT LEAD MANAGERS
ARRANGER &
JOINT LEAD MANAGER
15 Stout Street
WELLINGTON
What is this?
This is an offer of senior secured fixed rate green bonds (Green
Bonds). The Green Bonds are debt securities issued by Argosy
Property Limited (Argosy). You give Argosy money, and in
return Argosy promises to pay you interest and repay the money
at the end of the term. If Argosy runs into financial trouble, you
might lose some or all of the money you invested.
About the Argosy Group
Argosy is listed on the NZX and is the parent company of a
group of property companies (the Argosy Group) that own a
diversified portfolio of industrial, office and retail properties
predominantly in Auckland and Wellington, with a modest
tenant-driven exposure to other parts of New Zealand.
Purpose of this Offer
The proceeds of the Offer are intended to be used to refinance
existing bank debt that supports “Green Assets”. Green Assets
are office, industrial or retail buildings, including upgrades,
owned or undertaken by members of the Argosy Group that
meet certain criteria established by Argosy in Argosy’s “Green
Bond Framework” and therefore promote the transition to a
sustainable future. The funds from the Green Bonds may be
internally allocated to other Green Assets in accordance with
the Green Bond Framework. Under the Green Bond
Framework, any proceeds that are not internally allocated to
Green Assets will be temporarily invested in assets such as cash
or cash equivalents.
If Argosy fails to comply with the Green Bond Framework or related matters or if the Green Bonds cease to satisfy the Green Bond
Principles, as described at Section 5.2 of this PDS (Compliance with the Green Bond Principles):
• no Event of Default or any other breach will occur in relation to the Green Bonds; and
• neither you nor Argosy have any right for the Green Bonds to be repaid early.
This means there is no obligation on Argosy to comply with the Green Bond Framework or the Green Bond Principles on
an ongoing basis.
Key terms of the Offer
Description of the
debt securities
Senior secured fixed rate green bonds.
Term
7 years maturing on the Maturity Date (27 March 2026)
Interest Rate
A fixed rate of interest will be payable on the Green Bonds until the Maturity Date. The Interest Rate will be
determined on the Rate Set Date (6 March 2019) and announced via NZX on or about the Rate Set Date.
The Interest Rate will be equal to the sum of the Base Rate and the Margin but in any case will be no less than
the minimum Interest Rate announced via NZX on or about 27 February 2019.
The Issuer also expects to announce an indicative Margin range through NZX on or about 27 February 2019.
The actual Margin for the Green Bonds (which may be above or below the announced indicative Margin
range) is the rate (expressed as a percentage rate per annum) determined by Argosy on the Rate Set Date.
Structure of
the Offer
The Offer consists of:
• the Priority Offer of up to NZ$10 million, which is only open to New Zealand Retail Shareholders; and
• the General Offer of up to NZ$65 million (plus up to NZ$25 million of oversubscriptions at Argosy’s
discretion), which is open to all investors resident in New Zealand.
If any amount of the Priority Offer is not taken up by the relevant Closing Date, Argosy may reallocate up to
a corresponding amount to the General Offer at its absolute discretion.
“New Zealand Retail Shareholders” are members of the public resident in New Zealand who hold ordinary
shares in Argosy (as at the time of applying for Green Bonds and on the Closing Date for the Priority Offer)
and excludes institutional shareholders unless determined by Argosy in its discretion.
Opening Date
7 March 2019
Closing Dates
Priority Offer: 20 March 2019
General Offer: 22 March 2019
Interest Payment
Dates
Interest is scheduled to be paid in arrear on each quarterly Interest Payment Date, being 27 March, 27 June,
27 September and 27 December in each year during the term of the Green Bonds, commencing on 27 June
2019 and including the Maturity Date.
Further Payments,
Fees or Charges
Taxes may be deducted from interest payments on the Green Bonds. See Sections 7 (Tax) and 8 (Tax
consequences for Overseas Holders) of this PDS.
You are not required to pay brokerage or any charges to Argosy in relation to applications under the Offer.
However, you may have to pay brokerage:
• if your application is made under the Priority Offer, to the financial intermediary (if you use one) who
submits your application; or
• if your application is made under the General Offer, to the Bookbuild participant from whom you receive
an allocation of Green Bonds.
The Offer is subject to certain selling restrictions and you will be required to indemnify certain people if you
breach these. More information on this can be found in Section 3.2 of this PDS (Description of the Offer).
01.Key Information Summary
01
Argosy Property Limited | Product Disclosure Statement
Who is responsible for repaying you?
Argosy as the issuer of the Green Bonds is responsible for paying
interest on the Green Bonds and for the repayment of the Green
Bonds on the Maturity Date.
The obligations of Argosy to pay interest on the Green Bonds
and for the repayment of the Green Bonds on the Maturity
Date are guaranteed by certain subsidiaries of Argosy, being
Argosy Property Management Limited, Argosy Property No.1
Limited and Argosy Property No.3 Limited (together, the
“Guaranteeing Subsidiaries”).
The Green Bonds are not guaranteed by any other member
of the Argosy Group or by any other person.
How you can get your money out early
No early repayment
Argosy does not have any right to repay your Green Bonds before
the Maturity Date. Similarly, you have no right to request that
your Green Bonds be repaid early unless an Event of Default
has occurred (see Section 5.3 of this PDS (Events of Default)).
Sale of Green Bonds
Argosy intends to quote these Green Bonds on the NZX Debt
Market. This means you may be able to sell them on the NZX
Debt Market before the end of their term if there are interested
buyers. If you sell your Green Bonds, the price you get will vary
depending on factors such as the financial condition of the Argosy
Group and movements in the market interest rates. You may
receive less than the full amount that you paid for them.
How Green Bonds rank for repayment
In a liquidation of Argosy, your claim for payment of the Face
Value of your Green Bonds and accrued interest will rank:
• behind holders of prior-ranking security interests and
holders of claims on Argosy that are preferred by law;
• equally with claims of other Holders and holders of other
secured claims on Argosy that rank equally with the Green
Bonds; and
• ahead of claims of holders of lower ranking secured claims,
holders of unsecured claims on Argosy and shareholders.
Section 5.4 of this PDS (Ranking and security) contains more
information about the ranking of the Green Bonds.
What assets are these Green Bonds
secured against?
The Green Bonds are secured by a general security interest
granted by Argosy and the Guaranteeing Subsidiaries over all
of their property (except any property held by it as trustee),
together with first ranking Mortgages granted over all of the
land (including the buildings and other fixtures on that land)
owned by them.
More information about the security interests granted by Argosy
and the Guaranteeing Subsidiaries is set out in Section 5.4 of this
PDS (Ranking and security).
Key risks affecting this investment
Investments in debt securities have risks. A key risk is that
Argosy does not meet its commitments to repay you or pay you
interest (credit risk). Section 6 of the PDS (risks of investing)
discusses the main factors that give rise to the risk. You should
consider if the credit risk of these debt securities is suitable
for you.
The interest rate for these Green Bonds should also reflect the
degree of credit risk. In general, higher returns are demanded
by investors from businesses with higher risk of defaulting on
their commitments. You need to decide whether the offer is fair.
Argosy considers that the most significant risk factors are:
• the risk of adverse changes in the New Zealand property
market, in particular in Auckland and/or Wellington which
may have a negative impact on market rentals from, or the
market value of, the Argosy Group’s property assets; and
• the risk of a natural disaster affecting the New Zealand
property market, in particular in Auckland or Wellington
impacting a large percentage of the Argosy Group’s property
assets. If that occurred, there is a risk that insurance proceeds
would not cover all of the costs resulting from the event.
If one or more of these risks eventuate, it may adversely affect
the financial position and performance of Argosy which may in
turn result in Argosy not making payments on the Green Bonds
when due.
This summary does not cover all of the risks of investing in the
Green Bonds. You should also read Sections 5 (Key features of
Green Bonds) and 6 (Risks of investing) of this PDS.
No credit rating
Argosy’s creditworthiness has not been assessed by an approved
rating agency. This means that Argosy has not received an
independent opinion of its capability and willingness to repay
its debts from an approved source.
Where you can find other market information
about Argosy
This is a short-form offer document that Argosy is permitted
to use because the Green Bonds rank in priority to Argosy’s
existing quoted financial products. Those existing quoted
financial products are ordinary shares in Argosy, which are
traded on the NZX Main Board (that is, the main board financial
product market operated by NZX). As a listed issuer on the
NZX, Argosy is subject to continuous disclosure obligations
that require it to notify certain material information to the
NZX for the purpose of that information being made available
to participants in the market. Argosy’s page on the NZX website
includes information made available under those continuous
disclosure obligations and can be found at
www.nzx.com/companies/ARG.
02
Argosy Property Limited | Product Disclosure Statement
1Key Information Summary01
2Key dates and Offer process06
3Terms of the Offer07
4Purpose of the Offer11
5Key features of Green Bonds12
6Risks of investing18
7Ta x21
8Tax consequences for Overseas Holders21
9Selling restrictions21
10Who is involved?22
11How to complain23
12Where you can find more information23
13How to apply24
14Contact information24
15Glossary25
Application Form – General Offer
Table of contents
03
Argosy Property Limited | Product Disclosure Statement
82 Wyndham Street
AUCKLAND
04
Argosy Property Limited | Product Disclosure Statement
Letter from the chairman of Argosy’s board
Dear Investor
On behalf of the Board of Directors, I am pleased to invite you to participate in this offer of senior secured fixed
rate green bonds (“Green Bonds”) to be issued by Argosy Property Limited.
Argosy is seeking to raise $75 million under the offer with the ability to accept an additional $25 million of
oversubscriptions. We want to ensure that our New Zealand Retail Shareholders have the opportunity to invest
in the Green Bonds. Accordingly, we have reserved $10 million of Green Bonds that are only available to those
investors under a Priority Offer. The General Offer of the remaining Green Bonds is open to all investors resident
in New Zealand. If any amount of the Priority Offer is not taken up by the relevant Closing Date, Argosy may
reallocate up to a corresponding amount to the General Offer at its absolute discretion.
The proceeds of the Green Bonds are intended to be used to refinance existing bank debt that supports
“Green Assets” owned by the Argosy Group. Green Assets must satisfy certain criteria and therefore promote the
transition to a sustainable future. We are committed to managing and reducing our impact on the environment,
and believe that investment in Green Assets plays a key role in achieving this goal.
We have developed a Green Bond Framework to ensure that the Green Bonds comply with the Green Bond
Principles published by the International Capital Markets Association. Ernst & Young Limited has undertaken
an independent third party review of our Green Bond Framework, and has provided its reasonable assurance
that our Green Bond Framework meets the requirements of the Green Bond Principles in all material respects.
Our New Zealand Retail Shareholders are welcome to apply for Green Bonds directly under the Priority Offer.
All investors resident in New Zealand can participate in the General Offer by contacting their financial adviser.
There are a number of risks associated with the Green Bonds that may affect your returns and repayment of your
investment in the Green Bonds. An overview of the key risks is set out in this PDS. You should read this carefully
before deciding whether to invest in the Green Bonds.
I also encourage you to seek financial, investment or other professional advice from a qualified professional
adviser as you take time to consider this offer.
On behalf of the Board, I look forward to your involvement in this offer and your support of Argosy.
For more information on the Green Bonds, please visit our website www.argosy.co.nz/greenbondoffer.
Yours faithfully,
P Michael Smith
Chairman, Argosy Property Limited
05
Argosy Property Limited | Product Disclosure Statement
Announcement of minimum Interest Rate and indicative
Margin range
27 February 2019
Rate Set Date
6 March 2019
Opening Date
7 March 2019
Closing Dates Priority Offer
20 March 2019
General Offer
22 March 2019
Issue Date
27 March 2019
Expected date of initial quotation and trading of the
Green Bonds on the NZX Debt Market
28 March 2019
First Interest Payment Date
27 June 2019
Interest Payment Dates
27 March, 27 June, 27 September and 27 December in each year
during the term of the Green Bonds
Maturity Date
27 March 2026
The Opening Date and the Closing Dates are indicative only and are subject to change. Argosy has the right in its absolute discretion
to open or close the Offer early, to accept late applications, and to extend the Closing Dates. If Argosy changes any of the Opening
Date and/or the Closing Dates, the changes will be announced via NZX as soon as reasonably practicable. If the Closing Dates are
extended, the Issue Date, the expected date of initial quotation and trading of the Green Bonds on the NZX Debt Market, the Interest
Payment Dates and the Maturity Date may be extended accordingly. Any such changes will not affect the validity of any applications
received.
Argosy reserves the right to cancel the Offer and the issue of the Green Bonds. If this occurs all application monies received will be
refunded (without interest) as soon as practicable, and in any event within 5 Business Days of Argosy announcing that the Offer has
been cancelled.
The Offer consists of a Priority Offer and a General Offer.
The Priority Offer will only be open to New Zealand Retail Shareholders.
The General Offer will be open to institutional investors and members of the public who are resident in New Zealand. All of the Green
Bonds offered under the General Offer (including any oversubscriptions) have been reserved for subscription by clients of the Joint
Lead Managers and other persons invited to participate in the Bookbuild. There will be no public pool for the Green Bonds offered
under the General Offer.
If you wish to apply for Green Bonds under the General Offer, you should contact your usual authorised financial adviser.
The Registrar must have received your completed application, together with payment in full, no later than 5pm (New Zealand time)
on the applicable Closing Date - see Section 13 of this PDS (How to apply).
02.Key dates and Offer process
06
Argosy Property Limited | Product Disclosure Statement
3.1 Description of the Green Bonds
Green Bonds
Issuer
Argosy Property Limited
Description
Senior secured fixed rate green bonds
The Green Bonds satisfy the
Green Bond Principles
Argosy has developed and adopted the Green Bond Framework to ensure that, as at the date of
this PDS, the Green Bonds comply with the Green Bond Principles. See Section 5.2 of this PDS
(Compliance with the Green Bond Principles).
Term
7 years maturing on the Maturity Date (27 March 2026)
Face Value
NZ$1.00 per Green Bond
Interest Rate
A fixed rate of interest will be payable on the Green Bonds until the Maturity Date.
The Interest Rate will be determined by Argosy (in consultation with the Arranger) following
the Bookbuild held on the Rate Set Date (6 March 2019). The Interest Rate will be announced
via NZX on or about the Rate Set Date. The Interest Rate will not change over the term of the
Green Bonds.
The Interest Rate will be equal to the sum of the Base Rate and the Margin but in any case will
be no less than the minimum Interest Rate announced via NZX on or about 27 February 2019.
The Issuer also expects to announce an indicative Margin range through NZX on or about
27 February 2019. The actual Margin for the Green Bonds (which may be above or below the
announced indicative Margin range) is the rate (expressed as a percentage rate per annum)
determined by Argosy (in consultation with the Arranger) through the Bookbuild held on the
Rate Set Date.
Interest payments
Interest will be calculated on an annual basis and is payable in equal amounts in arrear on each
quarterly Interest Payment Date, being 27 March, 27 June, 27 September and 27 December in
each year during the term of the Green Bonds, commencing on 27 June 2019 and including the
Maturity Date. The interest payment dates are subject to adjustment in accordance with the
Business Day convention below.
Business Day convention
If a payment date is not a Business Day, Argosy will make payment on the next Business Day,
but no adjustment will be made to the amount of interest payable as a result of the delay.
Entitlement to payments
Payments of interest on the Green Bonds will be made to the persons who are the Holders as at
5pm (New Zealand time) on the 10th day before the relevant Interest Payment Date (or such
other date as required by NZX).
Payments of any other amount will be made to the persons who are the Holders as at 5pm
(New Zealand time) on the date as is determined by Argosy and notified to NZX (or such other
date as required by NZX).
If such date would fall on a day which is not a Business Day, then payments will be made to the
persons who are the Holders as at the immediately preceding Business Day.
Taxes
Taxes may be deducted from interest payments on the Green Bonds. See Sections 7 (Tax) and 8
(Tax consequences for Overseas Holders) of this PDS.
Ranking
In a liquidation of Argosy, your claim for payment of the Face Value of your Green Bonds and
accrued interest will rank:
• behind holders of prior-ranking security interests and holders of claims on Argosy that are
preferred by law;
• equally with claims of other Holders and holders of other secured claims on Argosy that rank
equally with the Green Bonds; and
• ahead of claims of holders of lower ranking secured claims, holders of unsecured claims on
Argosy and shareholders.
Section 5.4 of this PDS (Ranking and security) contains more information about the ranking of
the Green Bonds.
03.Terms of the Offer
07
Argosy Property Limited | Product Disclosure Statement
Guarantee and security
Argosy’s obligations under the Green Bonds are guaranteed by the Guaranteeing Subsidiaries.
Each of Argosy and the Guaranteeing Subsidiaries has granted security interests over all of its
property (except any property held by it as trustee), including first ranking Mortgages over all of
the land (including the buildings and other fixtures on that land) owned by them, to secure
these obligations.
The Secured Assets include the Mortgaged Property Assets and rights under contracts relating
to the Mortgaged Property Assets (for example, rights to lease payments) and insurance
proceeds. See Section 5.4 of this PDS (Ranking and security).
The guarantee and security interests are granted in favour of the Security Trustee for the benefit
of all of the Secured Parties (including Holders) and can only be enforced in accordance with
the Security Trust Deed. See Section 5.4 of this PDS (Ranking and security).
Financial covenants
Argosy agrees:
• to ensure that the total principal amount of all indebtedness that is secured by the Secured
Assets is no more than 50% of the Mortgaged Property Value. See Section 5.4 of this PDS
(Ranking and security) under the heading “Restrictions on creating further secured
liabilities” for more information on what happens if Argosy does not comply with
this obligation;
• that it will not make any distributions (for example, dividends payable to shareholders) if an
Event of Default has occurred and is continuing or would occur as a result of making that
distribution; and
• that it will not grant, or permit to exist, any security interests over Mortgaged Property
Assets or any accounts receivable (for example, lease payments) or insurance proceeds
derived from the Mortgaged Property Assets other than the security interests granted under,
or permitted by, the General Security Deed, the Mortgages and the Security Trust Deed.
See Sections 5.4 (Ranking and security) and 5.5 (Distribution stopper) of this PDS.
No early repayment
Neither you nor Argosy has any right to cause the Green Bonds to be repaid before the Maturity
Date unless an Event of Default occurs.
Events of Default
If an Event of Default occurs and is continuing, the Supervisor may in its discretion, and must if
directed to do so by a Special Resolution, declare the Green Bonds to be immediately due and
payable. See Section 5.3 of this PDS (Events of Default).
Transfers
You may only transfer your Green Bonds in multiples of NZ$1,000 in aggregate Face Value and
after any transfer you and the transferee must each hold Green Bonds with an aggregate Face
Value of at least NZ$5,000 (or no Green Bonds).
Supervisor
The Supervisor is appointed by Argosy under the Trust Deed to act on behalf of Holders in
relation to matters connected with the Trust Deed or the terms of the Green Bonds.
The Supervisor is The New Zealand Guardian Trust Company Limited or such other supervisor
appointed in accordance with the Trust Deed.
Security Trustee
The Security Trustee holds the security interests for the benefit of the Secured Parties,
including the Holders.
The Security Trustee is NZGT Security Trustee Limited or such other security trustee
appointed in accordance with the Security Trust Deed.
See Section 5.4 of this PDS (Ranking and security) for more information about the role of the
Security Trustee.
08
Argosy Property Limited | Product Disclosure Statement
3.2 Description of the Offer
The Offer
Offer amount
Up to NZ$75 million plus up to NZ$25 million of oversubscriptions (at Argosy's discretion),
as described below under "Structure of the Offer" and "Offer process".
Use of proceeds
The proceeds of the Offer are intended to be used to refinance existing bank debt that supports
Green Assets owned by members of the Argosy Group.
Offer Opening, Closing Dates
and Issue Date
See Section 2 of this PDS (Key dates and Offer process).
Structure of the Offer
The Offer consists of:
• the Priority Offer of up to NZ$10 million, which is only open to New Zealand Retail
Shareholders; and
• the General Offer of up to NZ$65 million (plus up to NZ$25 million of oversubscriptions at
Argosy’s discretion), which is open to all investors resident in New Zealand.
Offer process
All Green Bonds offered under the Priority Offer will be reserved for New Zealand Retail
Shareholders. If any amount of the Priority Offer is not taken up by the relevant Closing Date,
Argosy may reallocate up to a corresponding amount to the General Offer at its absolute discretion.
There is no public pool for the Green Bonds offered under the General Offer. All Green Bonds
offered under the General Offer, including oversubscriptions, will be reserved for subscription
by clients of the Joint Lead Managers and other persons invited to join the Bookbuild.
Allocation of Green Bonds
Argosy may scale applications under the Priority Offer at its discretion.
If a Bookbuild participant receives an allocation of Green Bonds in the Bookbuild, the allocation of
those Green Bonds to that participant’s clients is determined by the participant, and not Argosy.
How to apply
Application instructions are set out in Section 13 of this PDS (How to apply).
Argosy reserves the right to refuse all or any part of any application for Green Bonds under the
Offer without giving a reason.
Early bird interest
Argosy will pay you interest on your application money at the Interest Rate (less any applicable
withholding taxes) for the period from (and including) the date on which your application money
is banked to (but excluding) the Issue Date. Argosy will pay the early bird interest within
5 Business Days of the Issue Date, unless your application money is returned for any reason.
If your application is refused or accepted in part only or the Offer is withdrawn, no early bird
interest will be paid on the application money returned to you.
Issue Price
Each Green Bond is issued at par (NZ$1.00 per Green Bond).
Minimum application amount
NZ$5,000 and in multiples of NZ$1,000 thereafter.
Refunds
If Argosy does not accept an application (whether because of late receipt or otherwise) or
accepts an application under the Offer in part only, all or the relevant balance of the application
monies received in respect of that application will be repaid to the applicant (without interest)
as soon as practicable and, in any event, within 5 Business Days of the Issue Date.
No underwriting
The Offer is not underwritten.
Brokerage
You are not required to pay brokerage or any charges to Argosy in relation to applications under
the Offer. However, you may have to pay brokerage:
• if your application is made under the Priority Offer, to the financial intermediary (if you use
one) who submits your application; or
• if your application is made under the General Offer, to the Bookbuild participant from whom
you receive an allocation of Green Bonds.
Quotation
Argosy intends to quote the Green Bonds on the NZX Debt Market. NZX ticker code ARG010
has been reserved for the Green Bonds.
NZX takes no responsibility for the content of this PDS. NZX is a licensed market operator and
the NZX Debt Market is a licensed market under the FMC Act.
Further bonds
Argosy is able to issue further bonds and incur other financial indebtedness without the consent
of Holders on such terms and conditions as Argosy may from time to time determine provided
that Argosy continues to comply with the financial covenants in the Trust Deed.
09
Argosy Property Limited | Product Disclosure Statement
Selling restrictions
The Offer is subject to the selling restrictions contained in Section 9 of this PDS (Selling restrictions).
By subscribing for Green Bonds, each investor agrees to indemnify Argosy, the Supervisor, the
Registrar, the Arranger, the Joint Lead Managers and their respective directors, officers,
employees and agents in respect of any loss, cost, liability or expense sustained or incurred as a
result of the investor breaching the selling restrictions contained in Section 9 of this PDS
(Selling restrictions).
Governing law
The Green Bonds, the Trust Deed, the Security Trust Deed, the General Security Deed, the
Mortgages, this PDS and the contract which is formed when Argosy accepts your application
are governed by New Zealand law.
3.3 Trading your Green Bonds on the
NZX Debt Market
Argosy intends to quote the Green Bonds on the NZX Debt
Market. To be eligible to trade your Green Bonds on the
NZX Debt Market, you must have an account with a Primary
Market Participant, a common shareholder number or CSN
and an authorisation code. If you do not have an account with
a Primary Market Participant, you should be aware that
opening an account can take a number of days depending
on the Primary Market Participant’s new client procedures.
If you do not have a CSN, you will be automatically assigned
one. If you do not have an authorisation code, it is expected
that you will be sent one by the Registrar. If you have an account
with a Primary Market Participant and have not received an
authorisation code by the date you want to trade your Green
Bonds, your Primary Market Participant can arrange to obtain
your authorisation code from the Registrar. Your Primary
Market Participant will be charged a fee for requesting your
authorisation code from the Registrar and may pass this cost
on to you.
You may only transfer your Green Bonds in multiples of
NZ$1,000 in aggregate Face Value and after any transfer you
and the transferee must each hold Green Bonds with an
aggregate Face Value of at least NZ$5,000 (or no Green Bonds).
You will likely have to pay brokerage on any transfer of
Green Bonds you make through a Primary Market Participant.
3.4 Trust Deed
The terms and conditions of the Green Bonds are set out in
the Master Trust Deed, as amended and supplemented by
the Supplemental Trust Deed. Holders are bound by, and are
deemed to have notice of, the Trust Deed (being the Master
Trust Deed as amended and supplemented by the Supplemental
Trust Deed).
The terms of the guarantee and the security interests are set
out in the Security Trust Deed, the General Security Deed and
the Mortgages.
If you require further information in relation to the Trust
Deed, the Security Trust Deed, the General Security Deed
or the terms of the Mortgages, you may obtain copies of
those documents from the Disclose register at
www.disclose-register.companiesoffice.govt.nz
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Argosy Property Limited | Product Disclosure Statement
Argosy acknowledges that its activities can have an impact on
the natural environment. Argosy is committed to managing
and reducing the consequences of those activities, including
by investing in Green Assets. The proceeds of the Offer are
intended to be used to refinance existing bank debt that
supports Green Assets. This will not change irrespective of the
total amount that is raised. The funds from the Green Bonds
may be internally allocated to other Green Assets in accordance
with the Green Bond Framework. Under the Green Bond
Framework, any proceeds that are not internally allocated to
Green Assets will be temporarily invested in assets such as cash
or cash equivalents. Argosy has developed and adopted the
Green Bond Framework to ensure that, as at the date of this
PDS, its processes for identifying Green Assets and managing
the use of the proceeds of the Green Bonds are consistent
with the Green Bond Principles. See Section 5.2 of this PDS
(Compliance with the Green Bond Principles).
The Offer is not underwritten.
04.Purpose of the Offer
143 Lambton Quay
WELLINGTON
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Argosy Property Limited | Product Disclosure Statement
5.1 General
A number of the key features of the Green Bonds are described in
Section 3 of this PDS (Terms of the Offer). Other key features of
the Green Bonds and further detail about some of the key
features described in Section 3 of this PDS (Terms of the Offer)
are described below. Copies of the Trust Deed, the Security Trust
Deed, the General Security Deed and the terms of the Mortgages
are included on the Disclose register.
5.2 Compliance with the Green Bond Principles
To confirm the integrity of the Green Bonds as a “green”
instrument, Argosy has ensured that, as at the date of this PDS,
the Green Bonds comply with the “Green Bond Principles”.
The Green Bond Principles are voluntary process guidelines
for issuing green bonds published by the International Capital
Markets Association or ICMA. They may be amended by ICMA.
As at the date of this PDS, the Green Bond Principles establish
four core components for an instrument to be considered to be
a green bond:
• Use of proceeds: The proceeds of the green bond must be
used to finance or refinance assets or other projects that
have clear environmental benefits.
• Process for project evaluation and selection: The issuer
should provide clear information to investors about the
issuer’s environmental sustainability objectives; the process
for evaluating eligible projects; and the eligibility criteria.
• Management of proceeds: The issuer should have internal
processes to track and attest to the use of the proceeds of
the green bond.
• Reporting: The issuer should make, and keep, readily
available up to date information on the use of the proceeds
of the green bond.
The Green Bond Principles also recommend the use of an
auditor or other third party to verify the issuer’s process
for project evaluation and selection and the management
of proceeds.
Argosy has developed and adopted the Green Bond Framework
to address these principles. Ernst & Young Limited (EY) has
provided an independent third party review of the Green Bond
Framework against the Green Bond Principles. Following that
review, EY has issued a reasonable assurance report to Argosy,
advising that Argosy’s pre-issuance process in relation to the
Green Bonds (as described in the Green Bond Framework)
meets the requirements of the Green Bond Principles in all
material respects.
EY has consented to statements regarding its role in relation to
the Green Bonds and the confirmations given in the reasonable
assurance report issued by EY being included in this PDS and
the Disclose register.
Set out below is a summary of the way in which the Green
Bond Framework addresses the Green Bond Principles as
at the date of this PDS. Argosy may amend the Green Bond
Framework from time to time. Any amendments to the
Green Bond Framework would apply to these Green
Bonds. There is, however, no obligation on Argosy to
comply with the Green Bond Framework or the Green
Bond Principles on an ongoing basis.
See “Reporting” below as to where you can access a copy of the
Green Bond Framework.
Use of proceeds
As described in Section 4 of this PDS (Purpose of the Offer),
the proceeds of the Green Bonds are intended to be used to
refinance existing bank debt that supports Green Assets.
Those funds may be internally allocated to other Green Assets
in accordance with the Green Bond Framework. Under the
Green Bond Framework, any proceeds that are not internally
allocated to Green Assets will be temporarily invested in assets
such as cash or cash equivalents.
Evaluation and selection of Green Assets
The Green Bond Framework assesses the environmental
sustainability of the Argosy Group’s properties by reference to
independent ratings issued under two standards administered
by the New Zealand Green Building Council. The standards are
the New Zealand Green Building Council’s Green Star ratings
and NABERSNZ ratings (a New Zealand adaptation of the
National Australian Building Environmental Rating System).
Green Star ratings may be issued in relation to a new building
or a major refurbishment of an existing building and may be
issued on a “design” basis or a “built” basis.
The NABERSNZ criteria look solely at energy performance,
and are used once buildings are occupied and operating for
a year or more.
Both ratings standards have a maximum of 6 stars.
To be eligible to be a Green Asset under the Green Bond
Framework, the project or building must be certified
as obtaining:
• a Green Star “Built” rating of at least 4-Stars; or
• a NABERSNZ “Energy Base Building Rating” or
“Energy Whole Building Rating” of at least 4-Stars,
or be targeting one of those ratings.
Management of proceeds
The Green Bond Framework provides that Argosy will use its
existing internal information systems to record the receipt and
internal allocation of the proceeds of the Green Bonds to Green
Assets. Any proceeds that are not internally allocated to Green
Assets will be temporarily invested in assets such as cash or
cash equivalents.
05.
Key features of Green Bonds
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Argosy Property Limited | Product Disclosure Statement
Reporting
The Green Bond Framework provides for Argosy to:
• publish semi-annual use of proceeds reports at the
same times that it reports on its half and full year
financial results; and
• report on any changes to the Green Bond Framework
as soon as practicable after those changes are made.
The Green Bond Framework also provides for these reports,
the Green Bond Framework and any updated Green Bond
Framework to be available on Argosy’s website,
www.argosy.co.nz/investor-centre/greenbondframework.
The Green Bond Framework and initial use of proceeds
report, as at the date of this PDS, is also available on the
Disclose register.
In addition, the Green Bond Framework provides that
an annual assurance process will be undertaken by an
independent third party assurance provider to confirm that
the Green Assets continue to meet the Green Bond Principles
and the requirements as set out in the Green Bond Framework.
As at the date of this PDS, the independent third party assurance
provider is EY.
If:
• Argosy fails to comply with the Green Bond Framework;
• Argosy or any Green Asset fails to comply with any
environmental laws and standards;
• the Green Bonds cease to satisfy the Green Bond
Principles; or
• Argosy fails to notify Holders that the Green Bonds cease
to comply with the Green Bond Framework or the Green
Bond Principles,
then:
• no Event of Default will occur in relation to the Green
Bonds; and
• neither you nor Argosy have any right for the Green
Bonds to be repaid early.
This means there is no obligation on Argosy to comply with
the Green Bond Framework or the Green Bond Principles on
an ongoing basis.
5.3 Events of Default
Your Green Bonds may only become repayable before the
Maturity Date if an “Event of Default” occurs.
The Events of Default are set out in the Trust Deed and, in
summary, include events such as:
• Argosy does not pay amounts on the Green Bonds when due;
• Argosy does not comply with any of its other material
obligations under the Trust Deed;
• Argosy makes a material misrepresentation under the Trust
Deed;
• an insolvency event occurs in relation to Argosy or a
Guaranteeing Subsidiary;
• indebtedness of Argosy or a Guaranteeing Subsidiary of more
than NZ$2 million (in total) is not paid when due or becomes
repayable early because of a default;
• a Guaranteeing Subsidiary does not comply with its material
obligations under the guarantee granted under the General
Security Deed; or
• Argosy fails to remedy a breach of the loan to value ratio
within the grace periods set out in the Trust Deed. The grace
periods are described under the heading “Restrictions on
creating further secured liabilities” in Section 5.4 of this PDS
(Ranking and security).
This summary does not cover all of the Events of Default or
provide full details of the Events of Default. For example, in
some cases, the Events of Default are subject to thresholds or
allow grace periods for the event to be remedied. See Condition
7.1 of the Trust Deed for full details of the Events of Default.
If an Event of Default occurs, the Supervisor will give written
notice to Argosy, declaring that the Face Value of the Green
Bonds, together with accrued but unpaid interest is immediately
due and payable if:
• the Supervisor exercises its discretion to do this; or
• the Supervisor is directed to do this by a Special Resolution.
If this occurs, Argosy will need to repay you the Face Value of
your Green Bonds, together with accrued but unpaid interest to
the date of repayment.
As described in more detail below in Section 5.4 of this PDS
(Ranking and security), Argosy’s obligations under the Green
Bonds are:
• guaranteed by the Guaranteeing Subsidiaries; and
• secured against the property of Argosy and the Guaranteeing
Subsidiaries.
However, the guarantee and security interests are shared with
the other Secured Parties as described in that section and can
only be enforced in accordance with the Security Trust Deed.
5.4 Ranking and security
Ranking
The Green Bonds constitute secured obligations of Argosy. In a
liquidation of Argosy, your claim for payment of the Face Value
of your Green Bonds and accrued interest will rank:
• behind holders of prior-ranking security interests and
holders of claims on Argosy that are preferred by law;
• equally with claims of other Holders and holders of other
secured claims on Argosy that rank equally with the Green
Bonds; and
• ahead of claims of holders of lower ranking secured claims,
holders of unsecured claims on Argosy and shareholders.
Argosy’s obligations under the Green Bonds are supported
by the guarantees and security interests granted by the
Guaranteeing Subsidiaries. As those Guaranteeing Subsidiaries
hold materially all of the assets of the Argosy Group, it is
important to understand where the Green Bonds would rank
in a liquidation of the Argosy Group as well. The following
diagram shows how the liabilities of the Argosy Group,
including the Green Bonds, rank in the liquidation of the Argosy
Group. The diagram does not describe every type of liability or
security that the Argosy Group may have over the term of the
Green Bonds.
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Argosy Property Limited | Product Disclosure Statement
Ranking on a liquidation
of the Argosy Group
Type of obligationAmount of existing liabilities and
equity of the Argosy Group
1
Higher
ranking
Lower
ranking
Liabilities that rank in priority
to the Green Bonds
2
Prior ranking secured obligations
and creditors preferred by law
(for example, certain amounts
payable to the Inland Revenue)
NZ$0.5 million
Liabilities that rank equally with
the Green Bonds (including the
Green Bonds)
3
Secured obligations (for example:
The Green Bonds
Amounts outstanding under
a loan facility provided by
certain financial institutions
Certain derivative transactions,
such as interest rate swaps)
NZ$641.5 million
Liabilities that rank below
the Green Bonds
Unsecured obligations (for example,
general creditors)
NZ$21.9 million
Equity
4
Ordinary shares and retained earnings NZ$967.9 million
Basis of preparation of table
1. The amounts in this table are based on Argosy’s half-year financial statements prepared as at 30 September 2018 but adjusted to
assume NZ$100 million (including NZ$25 million of oversubscriptions) of Green Bonds are issued under the Offer and that the
proceeds of the Green Bonds are applied to refinance existing bank debt that supports Green Assets. The final size of the Offer
will not materially impact the amounts in this table because the proceeds of the Green Bonds are intended to be applied to
refinance existing bank debt that supports Green Assets. Amounts are subject to rounding adjustments.
2. Liabilities that rank in priority to the Green Bonds on a liquidation include certain amounts payable to the Inland Revenue and
employees. There are typically other liabilities which arise when a company is in liquidation which are not possible to foresee and
cannot therefore be quantified.
3. The Green Bonds rank equally with the existing bank debt that is intended to be refinanced with the proceeds of the Offer. The
amounts in this table assume that the proceeds of the Green Bonds are applied to refinance existing bank debt that supports
Green Assets. Accordingly:
(a) the amount of the liabilities that rank equally with the Green Bonds as set out in the table above, which assumes NZ$100
million (including NZ$25 million of oversubscriptions) of Green Bonds are issued,
is the same as
(b) the amount of the liabilities that would rank equally with the Green Bonds as stated in Argosy’s half-year financial statements
prepared as at 30 September 2018.
4. The amount of equity stated in the table above includes an amount in relation to Argosy’s existing financial products that are
quoted on NZX, being Argosy’s ordinary shares.
Security granted by Argosy
Argosy has granted security interests over all of its property (except any property held by it as trustee) in favour of NZGT Security
Trustee Limited as Security Trustee.
As the parent company of the Argosy Group, Argosy’s only significant property is the shares that it holds in the Guaranteeing
Subsidiaries and intercompany loans made to members of the Argosy Group. That is, all of the Argosy Group’s property assets are
owned by Guaranteeing Subsidiaries. However, as discussed below under the heading “Guarantees”, the Guaranteeing Subsidiaries
have also granted security interests, including Mortgages over the Mortgaged Property Assets, to the Security Trustee.
The Security Trustee holds those security interests on trust for the Secured Parties. As at the date of this PDS, the Secured Parties are:
• the Holders;
• the Supervisor (in respect of its fees and costs);
• certain financial institutions who provide lending facilities and derivatives to Argosy;
• the facility agent under Argosy’s bank lending documents;
• the Security Trustee (in respect of its fees and costs); and
• any predecessor Security Trustee (in relation to its continuing rights of indemnity).
However, other persons may become Secured Parties in the future.
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Argosy Property Limited | Product Disclosure Statement
The amount of Argosy’s liabilities that are secured in favour
of the Security Trustee is NZ$641.5 million. When the
value of Argosy’s Secured Assets and the Guaranteeing
Subsidiaries’ Secured Assets is taken into account, the total
value of the property secured in relation to those liabilities
is NZ$1,641.2 million. These amounts are based on Argosy’s half-
year financial statements prepared as at 30 September 2018 but
adjusted to assume NZ$100 million (including NZ$25 million of
oversubscriptions) of Green Bonds are issued under the Offer.
The issue of the Green Bonds does not impact on the amount of
Argosy’s secured liabilities as the proceeds of the Green Bonds
are intended to be applied to refinance existing bank debt that
supports Green Assets.
The documents that create or govern the security interests
granted by Argosy are:
• the Security Trust Deed; and
• the General Security Deed, which creates a security interest
over all of Argosy’s property (except any property held by it
as trustee).
As at the date of this PDS, Argosy has not granted a general
security interest over its property in favour of any other creditor.
However as described below under the heading “Restrictions
on creating further secured liabilities”, Argosy is permitted
to grant security interests to other creditors in certain
limited circumstances.
The Security Trustee may release the security interests held
over Secured Assets in certain circumstances without the
consent of Holders. However, it can only release security if it
will not cause a breach of the terms of the Green Bonds or the
terms of any other secured indebtedness (for example, the loan
to value ratio described below under the heading “Restrictions
on creating further secured liabilities”).
Guarantees
The Guaranteeing Subsidiaries, being Argosy Property
Management Limited, Argosy Property No.1 Limited and
Argosy Property No.3 Limited, have granted an unconditional
and unlimited guarantee of Argosy’s obligations under the
Green Bonds.
Each Guaranteeing Subsidiary has granted security interests
over all of its property (except any property held by it as trustee)
in favour of the Security Trustee to secure all of its obligations
under the guarantee. The Secured Assets of the Guaranteeing
Subsidiaries includes the Mortgaged Property Assets and rights
under contracts relating to the Mortgaged Property Assets (for
example, rights to lease payments) and insurance proceeds.
As at the date of this PDS, all of the Green Assets of the Argosy
Group are held by Argosy Property No.1 Limited.
The documents that create or govern the security granted by
each Guaranteeing Subsidiary are:
• the Security Trust Deed;
• the General Security Deed, which creates a security interest
over all of the Guaranteeing Subsidiary’s property (except
any property held by it as trustee). As at the date of this
PDS, only Argosy Property No.1 Limited holds property on
trust, being retention moneys in relation to construction
contracts; and
• the Mortgages granted by Argosy Property No.1 Limited,
being first ranking registered mortgages over all of the land
(including the buildings and other fixtures on that land)
owned by the Guaranteeing Subsidiaries.
Having regard to the Secured Assets of the Guaranteeing
Subsidiaries together (including the Mortgaged Property
Assets), the Secured Assets are sufficient and are reasonably
likely to be sufficient to:
• pay all amounts that may become owing under the guarantee;
and
• pay all other secured liabilities that rank equally with or in
priority to each Guaranteeing Subsidiary’s obligations under
the guarantee.
All of the Guaranteeing Subsidiaries are part of the Argosy Group.
Security Trust Deed
The Security Trustee holds the security interests for the benefit
of all of the Secured Parties and the security interests can only
be enforced in accordance with the Security Trust Deed. The
Supervisor represents the Holders in relation to the Security
Trust Deed (that is, individual Holders do not participate in the
administration of the Security Trust Deed).
In summary:
• if an event of default occurs under any of the secured
liabilities (for example, an Event of Default (see Section 5.3
of this PDS (Events of Default))), the affected Secured Party
must notify the Security Trustee, who then notifies the other
Secured Parties (or their representatives). A 15 business day
consultation process is undertaken with a view to the
Secured Parties agreeing whether to enforce the security
interests and, if so, what steps to take.
• If the Secured Parties are not in agreement following such
consultation process, each specified group of Secured Parties
has rights to direct the Security Trustee to enforce the
security interests in certain circumstances. For example, the
facility agent under Argosy’s bank lending documents can
direct the Security Trustee to enforce the security interests
if any “Event of Default” as defined in the bank lending
document occurs. In addition, the Supervisor can direct the
Security Trustee to enforce the security interests if:
—Argosy has failed to pay amounts due on the Green Bonds
and does not remedy that default within the relevant
grace period;
—Argosy is required to repay more than NZ$2 million (in
total) of other indebtedness before its ordinary due date
because of a default;
—the loan to value ratio (described below under the
heading “Restrictions on creating further secured
liabilities”) has been breached and has not been remedied
within the relevant grace periods; or
—any other Event of Default under the Green Bonds occurs
that Argosy has notified the Security Trustee that it, the
Supervisor and the facility agent under Argosy’s bank
lending documents have designated as a major bond
default event. No additional major bond default events
have been designated in relation to the Green Bonds.
However, if the Security Trustee receives conflicting
instructions from other Secured Parties, it can only act on the
instructions of a majority by value of the Secured Parties.
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Argosy Property Limited | Product Disclosure Statement
If the security interests are enforced, the proceeds of the
Secured Assets are distributed:
• first, to the Security Trustee and its predecessors in and
towards payment of all fees, costs and other amounts payable
to the Security Trustee or its predecessors under the Security
Trust Deed;
• second, in and towards the costs and expenses of any receiver
appointed in respect of the Secured Assets;
• third, to the Secured Parties on a pro rata basis; and
• fourth, if any surplus remains, to Argosy and/or the
Guaranteeing Subsidiaries.
In general, the Security Trustee may only agree to amend
the Security Trust Deed, the General Security Deed and the
Mortgages or grant a waiver or consent under those documents
if directed to do so by a majority of the Secured Parties.
The majority is determined by calculating:
• the total principal amount of secured indebtedness
outstanding to each Secured Party involved in making
the relevant decision,
as a proportion of;
• the total principal amount of secured indebtedness
outstanding under the Security Trust Deed at the
relevant date,
although, in some cases, the calculation of the total principal
amount of secured indebtedness includes the maximum
principal amount of secured indebtedness that the relevant
Secured Party is committed to make available, even if it is not
outstanding at that time. Secured Parties holding at least 50.1%
of the secured indebtedness can form the necessary majority.
As at the date of this PDS, Argosy’s bank lending facility is for
a principal amount of NZ$650 million, meaning that Argosy’s
bank lenders can form the required majority. However, if a
proposed amendment, waiver or consent would have a material
adverse effect on the holders of bonds issued by Argosy
(including Holders) compared to the effect it has on other
Secured Parties, the majority must include the Supervisor
(as representative of the holders of bonds issued by Argosy).
The Security Trust Deed contains a number of other important
terms. These terms include:
• the role of the Security Trustee;
• the powers and duties of the Security Trustee;
• the rule that Holders may only enforce their rights under
the Security Trust Deed through the Supervisor;
• the rule that the Supervisor may only enforce the guarantee
and security interests through the Security Trustee;
• the process for replacement of the Security Trustee; and
• the right of the Security Trustee to be indemnified.
Restrictions on creating further secured liabilities
The Argosy Group can, at any time after the Issue Date, create
further liabilities that rank equally with or in priority to the
Green Bonds. These liabilities could, for example, be other
secured bonds. However, there are covenants in the Trust Deed
and in Argosy’s bank lending documents that have the effect
of restricting the Argosy Group’s ability to create further
secured liabilities that rank equally with or in priority to
the Green Bonds.
Where those covenants are set out in Argosy’s bank lending
documents, those covenants are not terms of the Green Bonds so
you do not have the benefit of these. They may also be amended
or waived by the bank lenders (or expire if the bank lending
facilities terminate before the Maturity Date).
Loan to value ratios
Both the Trust Deed and Argosy’s bank lending documents
contain a loan to value ratio. These ratios limit the ability of
the Argosy Group to borrow money that is secured over the
Secured Assets by broadly requiring Argosy to ensure that,
at all times, the total principal amount of all indebtedness that
is secured by the Secured Assets is not more than 50% of the
Mortgaged Property Value. As at 30 September 2018, Argosy’s
loan to value ratio was 37.9%.
If Argosy breaches the loan to value ratio in its bank lending
documents, it may be required to provide additional security
interests or reduce the secured indebtedness. If Argosy fails to
take the required actions within the specified time, an event of
default will occur under Argosy’s bank lending documents.
If Argosy breaches the loan to value ratio under the Trust Deed,
it must remedy the breach within 6 months of the time that the
non-compliance is required to be reported to the Supervisor.
If Argosy does not meet this covenant after that 6 month period,
Argosy must notify the Supervisor and all Holders of the breach,
together with its plan to remedy the breach. If Argosy is still in
breach of this covenant after an additional 6 month period, an
Event of Default occurs.
Promise to not grant security interests
Under both the Trust Deed and Argosy’s bank lending
documents, Argosy agrees not to grant, or permit to exist, any
other security interests over its property or the property of the
Guaranteeing Subsidiaries. Under the Trust Deed, this promise
only relates to Mortgaged Property Assets and any accounts
receivable derived from, or insurance proceeds related to,
the Mortgaged Property Assets. Under Argosy’s bank lending
documents, this promise relates to all property owned by
Argosy or a Guaranteeing Subsidiary. However, there are a
number of exceptions under Argosy’s bank lending documents
which allow Argosy and the Guaranteeing Subsidiaries to grant
other security interests in certain circumstances. For example:
• if the bank lenders agree;
• certain security interests that arise by operation of law;
• netting, set-off and margin arrangements entered into in the
ordinary course of banking and hedging arrangements; and
• other security interests provided that the total amount
secured by any of these permitted security interests does not
exceed 5% of the total tangible assets of the Argosy Group.
Other restrictions in Argosy’s bank lending documents
Argosy’s bank lending documents contain other covenants that
limit the ability of Argosy and the Guaranteeing Subsidiaries
to create further secured liabilities. Those covenants are:
• a general restriction on incurring indebtedness for borrowed
money other than:
—capital markets or bank lending facilities provided that
there is no breach of the financial covenants that have
been agreed with the existing bank lenders; or
—indebtedness that is secured by a permitted security interest;
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Argosy Property Limited | Product Disclosure Statement
• a restriction on incurring secured indebtedness on more
favourable terms than the existing bank lending facility
without the existing bank lenders’ consent;
• a general restriction on granting guarantees other than
a guarantee relating to any permitted indebtedness or a
guarantee incurred in the ordinary course of business that
does not relate to indebtedness for borrowed money; and
• an “interest cover ratio” under which Argosy agrees to
ensure that (when calculated at the end of each quarter
during its financial year) EBIT of Argosy Group is at least
two times the interest and financing costs of the Argosy
Group, in each case, for the 12 month period ending on
that date. For this purpose, “EBIT” is net profit before
interest and financing costs and taxes (and subject to
certain adjustments, for example to exclude certain gains
or losses on the sale or revaluation of land).
5.5 Distribution stopper
Under the Trust Deed, Argosy agrees that it will not make any
distributions (for example, dividends payable to shareholders)
if an Event of Default has occurred and is continuing, or would
occur as a result of making that distribution.
5.6 Amendments to the Trust Deed
Argosy and the Supervisor are able to amend the Trust Deed
without the approval of Holders if Argosy and the Supervisor
are satisfied that the amendment does not have a material
adverse effect on the Holders. The Trust Deed may also be
amended if the amendment is approved by a Special Resolution.
Amendments made in accordance with the Trust Deed are
binding on you even if you did not agree to them.
5.7 Other relevant information about the
Trust Deed
The Trust Deed also contains a number of standard provisions,
including terms relating to:
• the role of the Supervisor and the powers and duties of
the Supervisor;
• the process for replacement of the Supervisor; and
• the right of the Supervisor to be indemnified.
82 Wyndham Street
AUCKLAND
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Argosy Property Limited | Product Disclosure Statement
6.1 Introduction
This Section 6 describes potential risks associated with an
investment in the Green Bonds, being:
• general risks associated with an investment in the
Green Bonds; and
• significant specific risks relating to Argosy’s
creditworthiness.
The selection of risks relating to Argosy’s creditworthiness has
been based on an assessment of a combination of the probability
of a risk occurring and the impact of the risk if it did occur. This
assessment is based on the knowledge of the directors of Argosy
as at the date of this PDS. There is no guarantee or assurance
that the significance of risks will not change or that other risks
will not arise over time.
Where practicable, the Argosy Group seeks to implement risk
mitigation strategies to manage the exposure to certain of the
risks outlined below, although there can be no assurance that
such arrangements will fully protect the Argosy Group from
such risks.
Investors should carefully consider these risk factors (together
with the other information in this PDS) before deciding to invest
in the Green Bonds.
This summary does not cover all of the risks of investing in the
Green Bonds.
The statement of risks in this Section 6 does not take account of
the personal circumstances, financial position or investment
requirements of any particular investor. It is important,
therefore, that before making any investment decision, investors
give consideration to the suitability of an investment in the
Green Bonds in light of their individual risk profile for
investments, investment objectives and personal circumstances
(including financial and taxation issues).
6.2 General risks
An investment in the Green Bonds is subject to the following
general risks:
Risk of insolvency of Argosy
The risk that Argosy becomes insolvent and is unable to meet its
obligations under the Green Bonds. In those circumstances, you
may not be paid interest on, or repaid the Face Value of, your
Green Bonds when due or at all.
Market risks associated with the Green Bonds
If you wish to sell your Green Bonds before the Maturity Date,
there is the risk that you are unable to find a buyer or that the
amount you receive is less than the amount you paid for the
Green Bonds.
The market price of the Green Bonds may fluctuate up or
down and the Green Bonds may trade below their Face Value
The market price of the Green Bonds on the NZX Debt Market
may fluctuate due to various factors. The Green Bonds may
trade at a market price below their Face Value. This means that
you may lose some of the money you invested if you wish to sell
your Green Bonds at a time when the market price of the
Green Bonds is lower than the Face Value.
The liquidity of the Green Bonds may be low
The market for the Green Bonds may not be liquid and may be
less liquid than that of other comparable securities issued by
other issuers.
If liquidity is low, there is a risk that if you wish to sell your
Green Bonds prior to the Maturity Date, you may not be able
to do so when you want to at an acceptable price, or at all.
The Interest Rate may become less attractive compared
to returns on other investments
The Interest Rate on the Green Bonds will be fixed for the
term of the Green Bonds. The Interest Rate may become less
attractive compared to returns on other investments during
the term of the Green Bonds.
6.3 Specific risks relating to Argosy’s
creditworthiness
The Argosy Group is exposed to a number of risks that may
affect the business of the Argosy Group and therefore the
financial performance and creditworthiness of Argosy.
The circumstances that Argosy is aware of that exist or that are
likely to arise that significantly increase the risk that payments
may not be made on the Green Bonds when due are described
below. The assessment of these circumstances is based on the
business of the Argosy Group as conducted as at the date of this
PDS. If the nature or scope of this business changes, other
circumstances or events could give rise to this risk.
Changes affecting the valuation and income of the
Argosy Group’s property assets
Argosy is subject to the prevailing property market conditions
in New Zealand, and in particular Auckland and Wellington,
where 95% of the Argosy Group’s property assets (by valuation)
are located (based on Argosy’s half-year financial statements
prepared as at 30 September 2018). The Argosy Group’s
revenues (and therefore, Argosy’s revenues) are highly
dependent on rental income from the Argosy Group’s property
assets, which are the Argosy Group’s primary source of income.
Accordingly, adverse changes in property market conditions
could have a negative impact on market rental returns from,
or the market value of, the Argosy Group’s property assets.
A reduction or interruption in rental income from the
Argosy Group’s property assets caused by such adverse
changes could materially negatively impact on the Argosy
Group’s financial performance.
In addition, as an individual property’s value is significantly
influenced by the net rental return from that property,
a reduction or interruption in rental income could also
negatively impact on the Argosy Group’s net worth. If such
changes are sustained and significant, they could put Argosy
at risk of breaching financial covenants under the Trust Deed or
its bank lending documents and may result in the Argosy Group
needing to sell properties in unfavourable market conditions.
06.Risks of investing
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Argosy Property Limited | Product Disclosure Statement
Adverse changes in the property market could arise from
a number of factors, including in relation to Argosy:
• changes in economic or credit conditions which affect
occupancy demands, particularly in Auckland or Wellington,
having regard to the concentration of the Argosy Group’s
properties in those centres;
• changes in business conditions leading to the bankruptcy,
liquidation or closure of one or more of Argosy’s major
tenants. As at 30 September 2018, Argosy’s top 10 major
tenants (other than government administration tenants)
made up approximately 27.0% of Argosy’s rental income.
Argosy’s government administration tenants constitute
approximately 24.9% of Argosy’s rental income as at
30 September 2018;
• the seismic resilience rating of the properties, and tenants’
perceptions of their adequacy (thereby affecting the
attractiveness and likely rental payable in connection
with those properties). In particular, recent changes in
the way compliance with building standards is assessed
may result in material capital expenditure to strengthen
buildings. For example, following recent assessment, it is
expected that approximately $20 million will be required
to strengthen the building at 7 Waterloo Quay to maximise
leasing potential; and
• new health and safety regulations (such as in relation to
asbestos and hazardous substances) may result in material
capital expenditure in order to ensure Argosy’s buildings
comply with new requirements. For example, Argosy has
additional obligations in relation to asbestos under the
Health and Safety at Work (Asbestos) Regulations 2016 as
the transitional provisions under these regulations ended
on 4 April 2018.
Insurance and natural disaster risks
A natural disaster affecting the New Zealand property market,
in particular Auckland or Wellington may affect a large
percentage of the Argosy Group’s property assets. For example,
the Argosy Group’s property assets (by valuation) are
concentrated in Auckland (approximately 71% as at 30
September 2018) and Wellington (approximately 24% as at
30 September 2018). Wellington in particular has been affected
by recent earthquakes. The Kaikoura earthquake in November
2016 damaged the property at 7 Waterloo Quay, Wellington, and
has contributed to Argosy reducing the value of that property
from NZ$101.25 million as at 31 March 2016 to NZ$87.7 million
as at 30 September 2018. If another natural disaster occurred
that was centred in Auckland or Wellington, a significant
portion of Argosy’s property assets could be impacted.
In the context of a natural disaster, Argosy arranges
comprehensive material damage, business interruption and
public and statutory liability insurance covering its property
assets and uses policy specifications and insured limits
customarily carried for similar asset portfolios in New Zealand.
However, some types of losses (such as earthquake and volcanic
eruption) are subject to higher deductibles. The insurance
programme is renewed annually and the scope of insurance
will be dependent on a number of factors such as the continued
availability of cover, the nature of the risks to be covered, extent
of the proposed coverage and the costs involved.
There is a risk that insurance proceeds may not cover all of the
costs resulting from an insurable event, that insurance claims
may be disputed after an insurable event, or that such an event
makes subsequent insurance cover difficult or costly to obtain.
For example, Argosy is currently submitting material damage
and business interruption claims under its insurance policy in
respect of 7 Waterloo Quay, Wellington, which suffered damage
as a result of the Kaikoura earthquake in November 2016.
Argosy commissioned a comprehensive damage survey of
7 Waterloo Quay, and detailed damage assessment reports were
provided to insurers in May 2018. Argosy envisaged that the
damage reports may be updated, based on Argosy’s advisors’
experience that additional earthquake damage may become
apparent. More recently, detailed reinstatement scope reports
were completed by Argosy’s expert consultants and these have
been provided to Argosy’s insurers. As at the date of this PDS,
Argosy is engaged in an exercise to quantify the cost to repair
the damage. Argosy expects that this process will be completed
in 2019 to enable a material damage claim to be submitted to
insurers. Argosy also has business interruption insurance, which
is expected to cover loss of rents and certain additional expenses
until mid-November 2018, being a period of two years from the
date of the earthquake.
There is no guarantee that all material damage and business
interruption claims will be recovered from insurers. A reduction
or interruption in rental income from the Argosy Group’s
properties caused by any of these factors could materially
negatively impact on the Argosy Group’s financial performance.
In addition, a reduction in the market value of Argosy’s property
assets (whether from reduced rental returns or other market
factors) could negatively impact Argosy’s net worth. If such
changes are sustained and significant, they could put Argosy at
risk of breaching financial covenants under the Trust Deed or its
bank lending documents and may result in the Argosy Group
needing to sell properties in unfavourable market conditions.
Development of properties
Development of properties is an important component of
Argosy’s business. As at the date of this PDS, Argosy is
undertaking the development or refurbishment of a number
of properties, for example 180 Hutt Rd, Wellington and Stewart
Dawsons Corner, Wellington. As at 30 September 2018, the
properties on which Argosy was considering undertaking
development or refurbishment in the future comprised 7.4% of
the Argosy Group’s property assets (by valuation). However, the
percentage of the Argosy Group’s property assets in respect of
which Argosy is considering development or refurbishment can
and does change from time to time.
Risks in relation to development, refurbishment and capital
works programmes include industrial disputes, inclement
weather, labour and materials supply shortages, design risks,
health and safety issues, escalating construction costs,
construction difficulty, delays or default by a construction
contractor, the inability to contract with construction
contractors on the terms anticipated, including as to cost and
timeframe and the existence of latent liabilities, such as asbestos
or other hazardous materials. Regulatory risks associated with
planning approvals and changes in planning legislation could
also affect Argosy’s ability to complete a development in a timely
manner. If Argosy is unable to complete a development in a
timely manner, then additional costs or claims may arise as a
result of a development.
There is also the risk that tenants will not be obtained for the
development space, or that a tenant may default or make claims
in relation to disruption. In addition, risks associated with land
development, infrastructure and below ground services may
exist which cannot be fully quantified until site works
19
Argosy Property Limited | Product Disclosure Statement
commence. If Argosy is unable to obtain or maintain a tenant
for the development space, then a reduction or interruption
in rental income may arise.
If such costs or claims, or reduction or interruption in rental
income, are significant, these could materially negatively impact
on the Argosy Group’s financial performance. In addition, a
reduction or interruption in rental income could also negatively
impact on the Argosy Group’s net worth. If such reduction or
interruption are sustained and significant, they could put Argosy
at risk of breaching financial covenants under the Trust Deed or
its bank lending documents and may result in the Argosy Group
needing to sell properties in unfavourable market conditions.
Before undertaking any refurbishment, expansion or
development proposal, Argosy evaluates identified risks
associated with that particular project, and then plans and
implements mitigation measures designed to manage those
risks within acceptable levels.
Funding risk
Argosy has a high degree of dependency on external funding
sources. Such funding often requires compliance with financial
covenants, breach of which may have a significant impact on
Argosy’s ability to maintain sufficient funding. If any of the risks
described in this section occur and are sustained and significant,
Argosy could be put at risk of breaching such covenants. Argosy
may in turn be forced to sell properties to reduce its debt, and its
financial condition may be significantly negatively affected.
One of these financial covenants is the loan to value ratio.
Argosy seeks to maintain a moderate level of debt with
headroom under its loan to value ratio. As at 30 September
2018, Argosy’s loan to value ratio was 37.9%. As described under
the heading “Loan to value ratios” in Section 5.4 of this PDS
(Ranking and security), Argosy is required to ensure that
Argosy’s loan to value ratio is not more than 50%.
Argosy is required to refinance existing debt facilities from time
to time. As at the date of this PDS, Argosy’s bank lending facility
(subject to any extension granted by the relevant financial
institutions) is due for repayment partly in 2020 and partly in
2021, which is prior to the Maturity Date. This exposes Argosy
to the risk that funding may not be available (or available on
commercially acceptable terms) to refinance existing debt as
and when required.
The availability of sufficient external funding depends on
a number of factors which may be out of Argosy’s control,
including international economic conditions, regulations
that affect the availability and cost of funding for property
investment companies, and lenders’ perception of Argosy’s
creditworthiness. Argosy is seeking to further manage this risk
by diversifying its sources of funding (including through the
Offer). However such diversification cannot eliminate this risk.
If Argosy is unable to refinance existing debt as and
when required, it may be forced to sell properties to repay
that debt, and its financial condition may be significantly
negatively affected.
Argosy’s financial statements can be obtained free of charge
from www.nzx.com/companies/ARG, and provide further
information about Argosy’s external funding sources.
Highgate Parkway, Silverdale
AUCKLAND
20
Argosy Property Limited | Product Disclosure Statement
The returns on the Green Bonds will be affected by taxes. The
information in this Section 7 is based on the law in force at the
date of this PDS. Future changes to tax laws or other laws may
affect the tax consequences of an investment in Green Bonds.
If you are a New Zealand tax resident or otherwise receive
payments of interest on the Green Bonds that are subject to
the New Zealand resident withholding tax (RWT) rules,
RWT will be deducted from payments of interest to you at
the relevant rate unless a valid exemption certificate has been
provided to the Registrar (or valid confirmation of another
exemption from RWT) on or before the record date for the
relevant payment date.
There may be other tax consequences for Holders from
acquiring or disposing of the Green Bonds, including under
the financial arrangements rules in the Income Tax Act 2007.
If you have any questions regarding the tax consequences of
investing in the Green Bonds you should seek advice from a
tax adviser.
07.Ta x
If you receive payments of interest on the Green Bonds that are
subject to the non-resident withholding tax (NRWT) rules, an
amount equal to any NRWT or approved issuer levy (AIL)
payable (as applicable) will be deducted from payments of
interest to you. Future changes to tax laws or other laws may
affect the tax consequences of an investment in Green Bonds.
Except where you elect otherwise and Argosy agrees, or it is not
possible under any law, Argosy intends to apply the AIL regime
in order to reduce the rate of NRWT to zero percent. In certain
cases, AIL cannot be paid to reduce the rate of NRWT to zero
percent, for example, where a Holder holds the Green Bonds
jointly with a New Zealand tax resident.
In addition to intending to reduce the rate of NRWT to zero
percent, Argosy intends to reduce the rate of AIL to zero percent
if possible. If the AIL regime changes, Argosy reserves the right
not to pay AIL.
Overseas Holders may be subject to tax in their own jurisdiction.
If you have any questions regarding the tax consequences of
investing in the Green Bonds you should seek advice from a
tax adviser.
08.Tax consequences for Overseas Holders
This PDS only constitutes an offer of Green Bonds to the public
in New Zealand. Argosy has not taken and will not take any
action which would permit a public offering of Green Bonds,
or possession or distribution of any offering material in respect
of the Green Bonds, in any country or jurisdiction where
action for that purpose is required (other than New Zealand).
The Green Bonds may only be offered for sale, sold or delivered
in a jurisdiction other than New Zealand in compliance with
all applicable laws and regulations in any jurisdiction in which
they are offered, sold or delivered.
Any information memorandum, disclosure statement, circular,
advertisement or other offering material in respect of the
Green Bonds may only be published, delivered or distributed
in compliance with all applicable laws and regulations
(including those of the country or jurisdiction in which the
material is published, delivered or distributed).
9.Selling restrictions
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Argosy Property Limited | Product Disclosure Statement
10.1 Who is involved?
NameRole
Issuer
Argosy Property LimitedIssuer of the Green Bonds
Supervisor
The New Zealand Guardian Trust
Company Limited
Holds certain covenants on trust for the benefit of the Holders,
including the right to enforce Argosy's obligations under the
Green Bonds
Security Trustee
NZGT Security Trustee LimitedHolds the security interests for the benefit of the Secured
Parties, including the Holders
Arranger
ANZ Bank New Zealand LimitedProvides assistance to Argosy with arranging the Offer and has
responsibilities to NZX in relation to the quotation of the
Green Bonds
Joint Lead Managers
ANZ Bank New Zealand Limited,
Bank of New Zealand, First NZ
Capital Securities Limited and
Forsyth Barr Limited
Assist with the marketing and distribution of the Offer
Registrar
Computershare Investor Services
Limited
Maintains the Register
Solicitors to the Issuer
Russell McVeaghProvide legal advice to the Argosy Group in respect of the Offer
Solicitors to the
Supervisor
Kensington SwanProvide legal advice to The New Zealand Guardian Trust
Company Limited in respect of the Offer
Auditor of the Issuer
Deloitte LimitedProvides guidance to the directors of Argosy on materiality
thresholds and performs procedures as requested by the directors
of Argosy to check the accuracy of financial information
Green Bond audit
assurance
Ernst & Young LimitedProvides an independent reasonable assurance report to the
directors of Argosy to verify the compliance of the Green
Bonds with the Green Bond Principles
Green Bond Co-ordinator
Australia and New Zealand Banking
Group Limited
Provide assistance to Argosy with structuring the "green"
aspects of the offer, including the Green Bond Framework and
facilitating the audit assurance of the Green Bonds
10.2 No reliance
This PDS does not constitute a recommendation by the Supervisor, the Arranger, any Joint Lead Manager or any of their respective
directors, officers, employees, agents or advisers to subscribe for, or purchase, any Green Bonds.
The role of the Arranger in relation to the Offer is solely to provide assistance to Argosy with arranging the Offer, organising the
Bookbuild and assisting with the quotation of the Green Bonds on the NZX Debt Market. The Joint Lead Managers will assist with
the marketing and distribution of the Green Bonds, but are not otherwise involved in the Offer.
You must make your own independent investigation and assessment of the financial condition and affairs of the Argosy Group before
deciding whether or not to apply for Green Bonds.
10.Who is involved?
22
Argosy Property Limited | Product Disclosure Statement
Complaints about the Green Bonds
If you have any problems or concerns about the Green Bonds,
contact Argosy Investor Relations, outlining your problems
or concerns and Argosy will endeavour to resolve the issues.
You can contact Argosy Investor Relations at:
Head of Investor Relations
Argosy Property Limited
39 Market Place
Auckland 1010
PO Box 90214
Victoria St West
Auckland 1142
Phone: +64 9 304 3400
Disclose register
Further information relating to Argosy and the Green Bonds
is available free of charge on the online Disclose register
maintained by the Companies Office. The Disclose register can
be accessed at www.disclose-register.companiesoffice.govt.nz. A
copy of the information on the Disclose register is also available
on request to the Registrar of Financial Service Providers at
registrar@fspr.govt.nz. The information contained on the
Disclose register includes copies of the Trust Deed, Security Trust
Deed, General Security Deed, terms of the Mortgages, Argosy’s
Green Bond Framework and EY’s independent reasonable
assurance report as well as other information.
You may also direct any complaints about the Green Bonds
to the Supervisor at the contact details below:
The New Zealand Guardian Trust Company Limited
Level 14
191 Queen Street
Auckland 1010
Phone: +64 9 909 5100
Attention: Relationship manager
The Supervisor is a member of an external, independent dispute
resolution scheme operated by Financial Services Complaints
Limited (FSCL) and approved by the Ministry of Consumer
Affairs. If the Supervisor has not been able to resolve your
issue, you can refer the matter to FSCL by submitting a
complaint form on FSCL’s website (www.fscl.org.nz),
emailing complaints@fscl.org.nz, calling FSCL on 0800 347 257,
or writing to FSCL at PO Box 5967, Wellington 6145.
The scheme will not charge a fee to any complainant to
investigate or resolve a complaint.
Information about Argosy
Argosy has its ordinary shares quoted on the NZX and,
accordingly, is subject to continuous disclosure obligations
under the NZX Listing Rules. Copies of announcements and
other documents disclosed via NZX can be obtained free of
charge from www.nzx.com/companies/ARG.
The Green Bond Framework provides for Argosy to:
• publish semi-annual use of proceeds reports at the same times
that it reports on its half and full year financial results; and
• report on any changes to the Green Bond Framework as soon
as practicable after those changes are made.
The Green Bond Framework also provides for these reports,
the Green Bond Framework and any updated Green Bond
Framework to be available free of charge on Argosy’s website,
www.argosy.co.nz/investor-centre/greenbondframework.
11.How to complain
12.Where you can find more information
23
Argosy Property Limited | Product Disclosure Statement
You can apply for Green Bonds from the Opening Date to the
applicable Closing Date. You must apply:
• in the case of the Priority Offer, using the application form
separately provided to you by Argosy or available on request
from the Registrar. You may also complete the application
form online as detailed below; or
• in the case of the General Offer, using the application form at
the back of this PDS.
Priority Offer
If you are a New Zealand Retail Shareholder you may apply for
Green Bonds in the Priority Offer. Argosy may, in its absolute
discretion, determine whether any application is eligible under
the Priority Offer.
If you are a New Zealand Retail Shareholder and wish to apply
for Green Bonds in the Priority Offer, you must:
• apply online at www.argosybondoffer.co.nz before 5pm
(New Zealand time) on the Closing Date for the Priority
Offer; or
• return a completed “Application Form – Priority Offer”
(with payment) to the office of the Registrar before 5pm
(New Zealand time) on the Closing Date for the Priority
Offer; or
• return a completed “Application Form – Priority Offer”
(with payment) to the office of any financial intermediary
in time to enable it to be forwarded to the Registrar before
5pm (New Zealand time) on the Closing Date for the
Priority Offer.
Contact details of the issuer of the Green Bonds:
Argosy Property Limited
39 Market Place
Auckland 1010
PO Box 90214
Victoria St West
Auckland 1142
Phone: +64 9 304 3400
General Offer
There is no public pool for the Green Bonds offered under the
General Offer. This means that, if you are not a New Zealand
Retail Shareholder, you can only apply for Green Bonds through
a financial intermediary who has obtained an allocation of
Green Bonds.
If you wish to invest in Green Bonds under the General Offer,
you should contact your financial adviser to arrange for your
application to be submitted. Your financial adviser must
ensure that your completed “Application Form – General Offer”
(with payment) is received by the Registrar no later than 5pm
(New Zealand time) on the Closing Date for the General Offer.
Other information about applying for
Green Bonds
There are separate application forms for the Priority Offer and
the General Offer. If you are applying under the Priority Offer,
you may also apply online at www.argosybondoffer.co.nz.
Additional instructions on how to apply for Green Bonds are
set out with the relevant application form.
The information in the application form you submit is
provided to enable Argosy, the Supervisor and the Registrar
to consider and process your application, and to administer
your investment, and to help and enable Argosy, the
Supervisor or the Registrar to comply with (or determine
what it needs to do to comply with) any applicable laws,
rules or regulations in New Zealand or any other country or
the requirements of any governmental, judicial or regulatory
entity or authority in any jurisdiction. By signing, or in the
case of online applications, submitting the application form
you authorise Argosy, the Supervisor and the Registrar to
disclose information in situations where Argosy, the Supervisor
or the Registrar consider it is required or permitted to do
so by any applicable laws, rules or regulations or by any
governmental, judicial or regulatory entity or authority
in New Zealand or any other jurisdiction. If you are an
individual under the Privacy Act 1993, you have the right
to access and correct any of your personal information.
Contact details of the Registrar:
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
Private Bag 92119
Auckland 1142
Phone: +64 9 488 8777
13.How to apply
14.Contact information
24
Argosy Property Limited | Product Disclosure Statement
Argosy
Argosy Property Limited
Argosy Group
Argosy and all of its subsidiaries
Arranger
ANZ Bank New Zealand Limited
Base Rate
the rate per annum (expressed on a percentage yield basis rounded, if necessary, to the nearest
2 decimal places with 5 being rounded up) which is determined by Argosy (in consultation
with the Arranger) as the mid market swap rate for a period equal to the period from the Issue
Date to the Maturity Date in accordance with market convention by reference to Reuters page
ICAPKIWISWAP1 or Bloomberg page ICNI or the successor page of either of those pages on
the Rate Set Date.
Bookbuild
the process conducted prior to the opening of the Offer whereby certain investors and brokers
lodge bids for Green Bonds and, on the basis of those bids, Argosy (in consultation with the
Arranger) determines the Margin and the total amount of Green Bonds to be issued.
Business Day
• for the purposes of giving notices, a day which is a business day within the meaning of the
NZX Listing Rules; and
• for all other purposes, a day (other than a Saturday, Sunday or public holiday) on which
commercial banks are open for general banking business in Auckland and Wellington.
Closing Dates
the Closing Date for the Priority Offer, which is 20 March 2019 and the Closing Date for the
General Offer, which is 22 March 2019.
Conditions
the terms and conditions of the Green Bonds set out in Schedule 1 of the Trust Deed.
Disclose register
the online offer register maintained by the Companies Office and the Registrar of
Financial Service Providers known as "Disclose", which can be accessed at
www.disclose-register.companiesoffice.govt.nz.
Event of Default
each event set out in Condition 7.1 of the Green Bonds, some of which are summarised in
Section 5.3 of this PDS (Events of Default).
EY
Ernst & Young Limited
Face Value
NZ$1.00 per Green Bond
FMC Act
Financial Markets Conduct Act 2013
FMC Regulations
Financial Markets Conduct Regulations 2014
General Offer
the offer of Green Bonds made by Argosy pursuant to this PDS to investors (both institutional
investors and members of the public) resident in New Zealand.
General Security Deed
the general security deeds:
(a) dated 3 December 2003 from Argosy Property No.1 Limited;
(b) dated 23 December 2010 from Argosy Property No.3 Limited;
(c) dated 30 August 2011 from Argosy Property Management Limited (previously named
Argosy Property No. 5 Limited); and
(d) dated 29 February 2012 from Argosy Property Limited,
each as amended, restated and consolidated into one composite general security deed on or
about 1 September 2014 and as subsequently amended and restated most recently by a deed
dated 28 February 2018.
Green Assets
office, industrial or retail buildings, including upgrades, owned or undertaken by members of the
Argosy Group, that have been identified by Argosy as meeting the criteria for "Green Assets" as set
out in the Green Bond Framework and therefore promote the transition to a sustainable future.
Green Bond Framework
the document developed and adopted by Argosy and entitled "Argosy Property Limited Green
Bond Framework version 1.0" dated 7 February 2019 as amended from time to time. The Green
Bond Framework may be amended by Argosy from time to time.
15.Glossary
25
Argosy Property Limited | Product Disclosure Statement
Green Bond Principles
the Green Bond Principles dated June 2018 as published by the International Capital Markets
Association as amended from time to time.
Green Bonds
the green bonds constituted and issued pursuant to the Trust Deed and offered pursuant to this
PDS. As detailed at Section 5.2 of this PDS (Compliance with the Green Bond Principles), the
Green Bonds would be considered "green bonds" for the purposes of the Green Bond Principles.
Guaranteeing Subsidiaries
Argosy Property Management Limited, Argosy Property No.1 Limited and Argosy Property
No.3 Limited.
Holder
a person whose name is entered in the Register as a holder of a Green Bond.
Interest Payment Dates
27 March, 27 June, 27 September and 27 December in each year during the term of the Green
Bonds, commencing on 27 June 2019 and including the Maturity Date subject to adjustment in
accordance with the Business Day convention described in Section 3.1 of this PDS (Description
of the Green Bonds).
Interest Rate
the fixed rate of interest per annum payable on the Face Value of the Green Bonds as announced
by Argosy via NZX on or about the Rate Set Date. The Interest Rate will be equal to the sum of
the Base Rate and the Margin but in any case will be no less than the minimum Interest Rate
announced via NZX on or about 27 February 2019.
Issue Date
27 March 2019
Issue Price
NZ$1.00 per Green Bond, being the Face Value of each Green Bond.
Joint Lead Managers
ANZ Bank New Zealand Limited, Bank of New Zealand, First NZ Capital Securities Limited and
Forsyth Barr Limited
Margin
the rate (expressed as a percentage rate per annum) determined by Argosy (in consultation with
the Arranger) through the Bookbuild held on the Rate Set Date.
Master Trust Deed
the trust deed dated 30 January 2019 between Argosy and the Supervisor, as amended from time
to time.
Maturity Date
27 March 2026
Mortgaged Property Assets
land (including the buildings and other fixtures on that land) owned by Argosy or a Guaranteeing
Subsidiary that is subject to a Mortgage.
Mortgaged Property Value
on any date, the total of the fair market value of the Mortgaged Property Assets (determined by
reference to the most recent valuations) plus costs and expenses that have been capitalised in
respect of the Mortgaged Property Assets after the date of each valuation.
Mortgages
the first ranking registered mortgages granted by Argosy or a Guaranteeing Subsidiary over all of
the land (including the buildings and other fixtures on that land) owned by that person. As at the
date of this PDS, all of the Argosy Group's land is owned by Argosy Property No.1 Limited, so only
that Guaranteeing Subsidiary has granted Mortgages.
NZ$
New Zealand dollars
New Zealand Retail
Shareholders
members of the public resident in New Zealand who hold ordinary shares in Argosy (as at the
time of applying for Green Bonds and on the Closing Date for the Priority Offer), excluding
institutional holders of ordinary shares in Argosy unless determined by Argosy in its discretion.
NZX
NZX Limited
NZX Debt Market
the debt security financial product market operated by NZX.
NZX Listing Rules
the listing rules of NZX, as amended, varied or waived from time to time.
Offer
the offer of Green Bonds made by Argosy pursuant to this PDS, consisting of the Priority Offer
and the General Offer.
Opening Date
7 March 2019
PDS
this product disclosure statement for the Offer dated 20 February 2019.
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Argosy Property Limited | Product Disclosure Statement
Primary Market Participant
has the meaning given in the NZX Participant Rules, as amended, varied or waived from time
to time.
Priority Offer
the offer of Green Bonds made by Argosy pursuant to this PDS to New Zealand Retail
Shareholders.
Rate Set Date
6 March 2019
Register
the register in respect of the Green Bonds maintained by the Registrar.
Registrar
Computershare Investor Services Limited
Secured Assets
the property of Argosy and the Guaranteeing Subsidiaries that is subject to a security interest or
mortgage granted pursuant to the General Security Deed or a Mortgage.
Secured Parties
at any time, the persons who are "Beneficiaries" under the Security Trust Deed. As at the date of
this PDS, the Secured Parties are Holders, the Supervisor, certain financial institutions which
provide lending facilities and derivatives to Argosy, the facility agent under Argosy's bank lending
documents, the Security Trustee and any predecessor Security Trustee.
Security Trust Deed
the security trust deed dated 17 May 2010 between Argosy, the Guaranteeing Subsidiaries as the
"Existing Guarantors", the Supervisor and certain financial institutions as the "Existing Lenders"
and the Security Trustee as amended most recently by a deed dated 18 October 2018.
Security Trustee
NZGT Security Trustee Limited or such other security trustee appointed in accordance with the
Security Trust Deed.
Selling restrictions
specific restrictions that apply to the Offer, as set out in Section 9 of this PDS (Selling restrictions).
Special Resolution
a resolution approved by holders of bonds issued by Argosy under the Master Trust Deed having a
face value of no less than 75% of the total face value of the bonds held by those persons who are
entitled to vote and who vote on the question.
subsidiary
has the meaning given in section 6 of the FMC Act.
Supervisor
The New Zealand Guardian Trust Company Limited or such other supervisor appointed in
accordance with the Trust Deed.
Supplemental Trust Deed
the deed dated 20 February 2019 between Argosy and the Supervisor relating to the Green Bonds.
Trust Deed
the Master Trust Deed as modified and supplemented by the Supplemental Trust Deed.
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Argosy Property Limited | Product Disclosure Statement
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Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.