Lodgement of PDS for Retail Bond Offer
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140
NZX MEDIA RELEASE
26 November 2020
RYMAN LODGES PRODUCT DISCLOSURE STATEMENT FOR RETAIL BOND
OFFER
Ryman Healthcare Limited (Ryman) has announced an offer of up to $100 million (with the ability
to accept oversubscriptions of up to an additional $50 million at Ryman’s discretion) of 6 year, fixed
rate bonds to New Zealand institutional and retail investors. The bonds will be unsubordinated
obligations of Ryman, and will have the benefit of a guarantee and security package provided by the
Ryman guaranteeing group.
The offer is expected to open on 7 December 2020 and close on 10 December 2020.
Ryman has appointed ANZ Bank New Zealand Limited (ANZ) as Arranger, and ANZ, Forsyth Barr
Limited, Hobson Wealth Partners Limited and Westpac Banking Corporation (ABN 33 007 457 141)
(acting through its New Zealand branch) as Joint Lead Managers in relation to the offer.
Full details of the offer are contained in the Product Disclosure Statement (PDS) which was lodged
today. The PDS is available through www.rymanhealthcare.co.nz/investors/bonds or by contacting a
Joint Lead Manager or your usual financial adviser, and must be obtained by investors before they
decide to acquire any bonds.
There is no public pool for the offer, with all of the bonds being reserved for clients of the Joint
Lead Managers, NZX participants and other approved financial intermediaries.
Investors can register their interest by contacting a Joint Lead Manager or their usual financial
adviser.
This offer is being made in accordance with the Financial Markets Conduct Act 2013 and the bonds
are expected to be quoted on the NZX Debt Market.
Copies of the PDS and Ryman’s roadshow presentation are attached and available through
www.rymanhealthcare.co.nz/investors/bonds
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140
Joint Lead Managers
0800 269 476 0800 367 227
0800 742 737 0800 942 822
About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 39
retirement villages in New Zealand and Australia. Ryman villages are home to more than 12,000
residents, and the group employs more than 6,000 staff.
Contacts:
For investor relations information contact Michelle Perkins, Investor Relations Manager, on 027 222
9684 (+64 27 222 9684) or email michelle.perkins@rymanhealthcare.com
For media information or images contact David King, Corporate Affairs Manager, on 021 499 602
(+64 21 499 602) or email david.king@rymanhealthcare.com
---
RYMAN HEALTHCARE LIMITED
OFFER OF 6 YEAR FIXED RATE,
SECURED, UNSUBORDINATED BONDS
ISSUED BY
RYMAN HEALTHCARE LIMITED
DATE: 26 NOVEMBER 2020
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.companiesoffice.govt.nz/disclose.
Ryman Healthcare 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
Product Disclosure
Statement
RYMAN HEALTHCARE LIMITED
1
What is this?
This is an offer (Offer) of fixed rate, secured, unsubordinated
bonds (Bonds). The Bonds are debt securities issued by
Ryman Healthcare Limited (Ryman). You give Ryman money,
and in return Ryman promises to pay you interest and repay
the money at the end of the term. If Ryman runs into financial
trouble, you might lose some or all of the money you invested.
About the Ryman Group
Ryman and the Subsidiaries make up the Ryman Group.
The Ryman Group is the largest retirement village operator
and developer of retirement villages in New Zealand and in
2014 expanded its development and operation of retirement
villages into Victoria, Australia.
At the date of this product disclosure statement (PDS) the
Ryman Group owns and operates 39 retirement villages
in New Zealand and Victoria which are home to more than
12,000 Residents and which employ more than 6,000 staff.
Ryman is listed on the NZX Main Board. As at close of the
Business Day before the date of this PDS, it has a market
capitalisation on the NZX of approximately $7,300m.
Purpose of this Offer
The purpose of the Offer is to provide diversity of funding
sources and tenor, and the proceeds of this Offer are intended
to be used to repay a portion of Ryman’s existing bank debt.
This will provide Ryman with additional headroom under the
Bank Facility Agreement which it can drawdown as required.
IssuerRyman Healthcare Limited.
Description of the Bonds
The Bonds are fixed rate, secured, unsubordinated bonds.
Term 6 years maturing on 18 December 2026.
Offer AmountUp to $100 million (with the ability to accept oversubscriptions of up to an additional $50 million
at Ryman’s discretion).
Interest RateThe Bonds will pay a fixed rate of interest until the Maturity Date.
The Interest Rate will be no lower than a minimum interest rate. This minimum interest rate and the
Indicative Margin will be determined by Ryman in conjunction with the Joint Lead Managers and
announced via NZX on or about 7 December 2020.
The Interest Rate will be determined by Ryman in conjunction with the Arranger on the Interest Rate
Set Date (10 December 2020) and will be the greater of:
• the minimum Interest Rate; or
• the sum of the Swap Rate on the Interest Rate Set Date and the Issue Margin.
The Issue Margin will be determined by Ryman in conjunction with the Joint Lead Managers
following a bookbuild on the Interest Rate Set Date. A bookbuild is a process whereby a margin is
determined by reference to bids from market participants for an allocation of Bonds at different
margins. The Interest Rate will be announced via NZX on the Interest Rate Set Date.
Interest paymentsInterest will be paid quarterly in arrear in equal amounts on 18 March, 18 June, 18 September and
18 December in each year (or if that day is not a Business Day, the next Business Day) until and
including the Maturity Date.
The First Interest Payment Date is 18 March 2021.
Opening DateMonday, 7 December 2020.
Closing Date Thursday, 10 December 2020 at 1pm.
Further payments,
fees or charges
Taxes may be deducted from interest payments on the Bonds. See section 7 (Ta x) for
further details.
Ryman will pay brokerage to market participants in respect of the Offer.
You are not required to pay brokerage or any other fees or charges to Ryman to purchase the
Bonds. However, you may have to pay brokerage to the firm from whom you receive an allocation
of Bonds. Please contact your broker for further information on any brokerage fees.
Selling restrictionsThe Offer is subject to certain selling restrictions and you will be required to indemnify certain
people if you breach these. See section 5 (Key features of the Bonds) for further details.
Minimum application
amount
$5,000 and multiples of $1,000 thereafter.
Key information summary
1
Key terms of the Offer
RYMAN HEALTHCARE LIMITED
2
Who is responsible for repaying you?
Ryman as Issuer is responsible for paying interest on,
and repaying, the Bonds.
The Bonds are guaranteed by the Guaranteeing Group under
the Guarantee. As Issuer, Ryman is not a guarantor of the
Bonds (despite being a member of the Guaranteeing Group).
As at the date of this PDS, all Subsidiaries of the Ryman
Group are Guarantors.
Other members of the Ryman Group may become
(or cease to be) Guarantors from time to time.
More information on the Guarantee can be found in
section 5 (Key features of the Bonds).
How you can get your money out early
Neither you nor Ryman are able to redeem the Bonds
before the Maturity Date. However, Ryman may be required
to repay the Bonds early if there is an Event of Default
(see section 5 (Key features of the Bonds)).
Ryman intends to quote these 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 Bonds, the price you get
will vary depending on factors such as the financial condition
of the Ryman Group and movements in the market interest
rates. You may receive less than the full amount that you
paid for them.
How Bonds rank for repayment
The Bonds are secured on an equal ranking basis with certain
other secured creditors, including Ryman’s bank lenders and
any other debt funding providers who become Beneficiaries
under the Security Trust Deed, and have the benefit of the
Security given by the Guaranteeing Group. This means that
on a liquidation of Ryman the Bonds will rank:
• below, and be repaid after, creditors preferred by law and
any limited permitted security interest (such as security
arising by law);
• equally with, and be repaid at the same time and pro-rata
with, all other liabilities secured under the Security Trust
Deed, such as other Bondholders, Ryman’s bank lenders
under the Bank Facility Agreement and any other debt
funding providers who become Beneficiaries under the
Security Trust Deed; and
• ahead of, and would be repaid before, any unsecured
creditors and shareholders of Ryman.
Further information on how the Bonds rank for repayment on
a liquidation of the Ryman Group, including the ranking of the
relevant securities held by the Statutory Supervisor can be
found in section 5 (Key features of the Bonds).
What assets are these Bonds secured against?
The Bonds are secured, under the Security Trust Deed, by:
• first ranking registered mortgages over:
• all land and buildings owned by NZ Guarantors that are
not NZ Village Companies. This includes bare land and
land that is under development and not yet used for
operational retirement villages; and
• any land and buildings owned by NZ Guarantors that
are NZ Village Companies which are on separate legal
titles to any land allocated for Units. This generally
includes hospital facilities, Community Facilities and care
centres (but only if that care centre does not contain any
Care Suites);
• second ranking registered mortgages over the care centre
of any NZ Village Company, but only if that care centre
includes any Care Suites; and
• general security over all the assets of each Guarantor
under the General Security Agreements and Guarantee.
This includes security over the shares held by Ryman in
Village Companies.
Each NZ Village Company provides first ranking mortgages
to the Statutory Supervisor over all land and buildings owned
by that NZ Village Company containing Units and the land and
buildings on which a care centre of any NZ Village Company is
located where the care centre includes Care Suites (together
the Statutory Supervisor’s Mortgages).
Prior to 1 September 2014, NZ Village Companies granted
a Resident Mortgage to a Resident over the NZ Village
Company’s reversionary interest in the land on which the
Resident’s Unit is located.
The Bondholders do not have the benefit of the Statutory
Supervisor’s Mortgages or any Resident Mortgage.
Also, each Resident of an Australian Village Company has
the benefit of a Statutory Charge over the land of the relevant
Australian Village Company to secure that company’s
obligation to repay the Australian Resident Loan to the
Resident. This charge ranks ahead of the general security
held by the Security Trustee over all of the assets of the
Australian Village Company.
More information on these arrangements can be found in
section 5 (Key features of the Bonds).
Key risks affecting this investment
Investments in debt securities have risks. A key risk is that
Ryman does not meet its commitments to repay you or pay
you interest (credit risk). Section 6 of this 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 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.
Ryman considers that the most significant risk factors are
the following.
1 Caring for older people/operations: The Ryman
Group provides care to a large number of older people
in New Zealand and Victoria, which carries an inherent
risk due to the vulnerable nature of this group. A greater
level and proportion of care (including hospital and
specialised dementia care) is offered in Ryman villages
than by many other operators. Because these higher
levels of care reflect a greater dependency by residents,
this risk is heightened for the Ryman Group. Incidents of
substandard care of Residents or improper conduct by
RYMAN HEALTHCARE LIMITED
3
staff members (including a failure to comply with care
standards) could undermine the public’s confidence
in Ryman’s ability to provide professional, high quality
care to Residents. Incidents of this nature could
reduce demand for care in Ryman Group villages, and
induce a corresponding decline in Ryman’s financial
performance. The same is true if a significant health,
safety or wellbeing incident within an operating village
resulted in harm to a Resident or staff member.
The number of Residents and nature of community
living in aged care centres carries a risk that an
outbreak of a virus (whether Covid-19 or another virus),
particularly where older persons are more susceptible
to the virus, may adversely affect Residents in one
or more Ryman care centres. Because the Ryman
Group provides a greater level and proportion of care
than many other operators, this risk is intensified. An
outbreak of a virus in a Ryman village, or perception
that Ryman is inadequately caring for Residents in a
village, could undermine confidence in Ryman’s ability
to provide care to Residents during a pandemic. This
in turn may cause a significant reduction in demand to
live in Ryman villages. Such an event could also require
Ryman to establish alternative facilities or increase
staffing to care for affected Residents, at increased cost
to Ryman. A significant decline in Residents at affected
care centres could also see Ryman’s costs of operating
its care centres not reducing in line with any decline.
2 Property market: A reduction in demand for
properties, or a downturn in the value of properties,
could occur in a market in which the Ryman Group
operates. This may result in a downward revaluation
of assets of the Ryman Group or slow Ryman’s
capacity to sell occupation rights to new units or resell
occupation rights to existing units. A reduced demand
or downturn in a property market could therefore
impact on the timeframes for the acquisition and
development of sites or impact on Ryman’s ability
to meet its bank and Bond covenants.
3 Construction: Ryman’s construction activities may
be adversely impacted by a range of risks. These
include an interruption in the supply of building
materials to Ryman Group villages under construction,
a significant one-off event that stalls or delays
construction of a village (especially where the village
includes large-scale buildings or the event has a
widespread impact at the village), and/or a material
delay in Ryman obtaining necessary consents to
undertake construction activities or in completing
construction. A significant one-off event might include
a material health, safety and wellbeing incident or
other regulatory breach, or a severe weather event,
fire or similar event. In addition, an outbreak or
ongoing presence of a disease (whether Covid-19 or
another pandemic) may result in regular or prolonged
interruptions to Ryman’s construction programme,
which could reduce Ryman’s build rate. Individually or
collectively these events could result in an inferior cash
flow position or delay revenues for the Ryman Group,
as well as Ryman’s ability to meet its targets.
4 Labour/immigration: Ryman’s ability to develop
new and existing villages within Ryman’s intended
timeframes and to operate care facilities as the Ryman
Group expands depends on Ryman being able to
attract and retain sufficient quality and experienced
employees in the Ryman Group’s construction and care
teams. Changes in immigration policy in New Zealand or
Australia could make this exercise more difficult. Events
that result in border closures or restrictions (including
due to a pandemic such as Covid-19) may limit the
number of potential overseas-trained staff available for
Ryman to recruit as Ryman requires. Both situations
could lead to slower growth in the Ryman Group or
delays in development. This may impede Ryman’s
financial performance.
This summary does not cover all of the risks of investing in the
Bonds. You should also read section 6 (Risks of investing) and
section 5 (Key features of the Bonds).
No credit rating
Ryman’s credit worthiness has not been assessed by an
approved rating agency. This means that Ryman 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 Ryman
This is a short-form offer document that Ryman is
permitted to use for this Offer because these Bonds rank
in priority to existing quoted financial products of Ryman.
The existing quoted financial products are ordinary shares
in Ryman, which are traded on the NZX Main Board.
Ryman is subject to a disclosure obligation that requires
it to notify certain material information to the NZX for
the purpose of that information being made available
to participants in the market. Ryman’s page on the NZX
website, which includes information made available under
the disclosure obligation referred to above, can be found
at www.nzx.com/companies/RYM.
RYMAN HEALTHCARE LIMITED
4
Dear Investor,
On behalf of Ryman’s directors, I am pleased to invite you to invest
in this offer of secured fixed rate bonds to be issued by Ryman
Healthcare Limited.
Ryman was founded in Christchurch in 1984 and has grown to become
the largest retirement village operator in New Zealand, as well as a
substantial operator in Victoria (Australia).
The aim back in 1984 was to improve the range of quality retirement
living options on offer for older Kiwis and to provide the best of care for
our residents – care that has got to be ‘good enough for mum (or dad)’.
Those aims have never changed.
Today, more than 36 years later, Ryman is an experienced retirement
village developer and operator.
Ryman’s 39 villages in New Zealand and Victoria provide homes and
care for more than 12,000 residents and employ more than 6,000 staff.
Ryman is recognised as the most trusted brand in aged care and
retirement living in New Zealand (2020 Reader’s Digest Awards) and
we consider ourselves an industry leader.
Ryman has consistently lifted standards in the industry by innovating
the way villages are built and the amenities provided, by pioneering
new systems of care and by aiming for excellence in clinical outcomes.
Ryman has consistently reinvested in growing its portfolio and
landbank in order to meet the forecast growth in the population aged
over 70 in its two key markets. These markets are set to more than
double over the next 30 years.
Ryman is seeking to raise up to $100 million under the Offer, with the
ability to accept oversubscriptions of up to an additional $50 million
at Ryman’s discretion. The proceeds will be used to repay a portion of
Ryman’s existing bank debt, providing diversity of funding and tenor
and helping to facilitate further growth.
Application has been made to NZX for permission to quote the
Bonds on the NZX Debt Market and all related requirements of NZX
that can be complied with on or before the distribution of this PDS
have been duly complied with. However, the Bonds have not yet
been approved for trading and NZX accepts no responsibility for any
statement in this PDS.
There are risks associated with the Bonds that may affect your returns
and repayment of your investment. An overview of these risks is set out
in this PDS. You should read this before deciding whether to invest in
the Bonds.
I encourage you to seek financial, investment or other advice
from a qualified professional adviser as you take the time to consider
this Offer.
On behalf of Ryman’s directors, I welcome your participation in the
Offer and your support of Ryman. For more information on the Bonds,
please visit our website: www.rymanhealthcare.co.nz/investors/bonds.
Yours sincerely,
Dr David Kerr
Chair, Ryman Healthcare Limited
Chair’s letter
Table of
Contents
1
�
3
4
5
6
7
8
9
10
11
12
Key information summary ...................1
Chair’s letter ...............................................4
Key dates and offer process .............5
Terms of the Offer ...................................5
Purpose of the Offer ..............................7
Key features of the Bonds ..................8
Risks of investing ....................................17
Ta x ..................................................................21
Who is involved? ...................................22
How to complain ...................................22
Where you can
find more information ........................23
How to apply ...........................................23
Contact information ...........................23
Glossary ....................................................24
Schedule 1: Subsidiaries ...................28
RYMAN HEALTHCARE LIMITED
5
Opening DateMonday, 7 December 2020
The minimum interest rate and the Indicative Margin is expected to be
determined and announced on this date.
Closing DateThursday, 10 December 2020 at 1pm
Interest Rate Set DateThursday, 10 December 2020
Issue Date and allotment dateFriday, 18 December 2020
Expected date of initial quotation
and trading of the Bonds on the
NZX Debt Market
Monday, 21 December 2020
Interest Payment Dates18 March, 18 June, 18 September and 18 December in each year until the
Maturity Date
First Interest Payment Date18 March 2021
Maturity DateFriday, 18 December 2026
The timetable is indicative only and subject to change.
Ryman may, in its discretion and without notice, vary the timetable (including by opening or closing the Offer early, accepting late
applications and extending the Closing Date).
If the Closing Date is extended, the Interest Rate Set Date, the Issue Date, the expected date of initial quotation and trading of the
Bonds on the NZX Debt Market, the Interest Payment Dates and the Maturity Date may also be extended. Any such changes will
not affect the validity of any applications received.
Ryman reserves the right to cancel the Offer and the issue of the Bonds, in which case any application monies received will be
refunded (without interest) as soon as practicable and in any event within 5 Business Days of the cancellation.
Key dates and offer process
2
Terms of the Offer
3
IssuerRyman Healthcare Limited.
Description of the
Bonds
Fixed rate, secured, unsubordinated bonds.
Term 6 years maturing on 18 December 2026.
Offer amountUp to $100 million plus oversubscriptions of up to an additional $50 million at the sole discretion
of Ryman.
Issue price$1.00 per Bond, being the Principal Amount.
Interest RateThe Bonds will pay a fixed rate of interest until the Maturity Date.
The Interest Rate will be no lower than a minimum Interest Rate. This minimum Interest Rate and
the Indicative Margin will be determined by Ryman in conjunction with the Joint Lead Managers and
announced via NZX on or about 7 December 2020.
The Interest Rate will be determined by Ryman in conjunction with the Arranger on the Interest Rate Set
Date (10 December 2020) and will be the greater of:
• the minimum Interest Rate; or
• the sum of the Swap Rate on the Interest Rate Set Date and the Issue Margin.
The Issue Margin will be determined by Ryman in conjunction with the Joint Lead Managers following
a bookbuild on the Interest Rate Set Date. A bookbuild is a process whereby a margin is determined by
reference to bids from market participants for an allocation of Bonds at different margins. The Interest
Rate will be announced via NZX on the Interest Rate Set Date.
Interest Payment
Dates
Interest will be paid quarterly in arrear in equal amounts on 18 March, 18 June, 18 September and 18
December in each year (or if that day is not a Business Day, the next Business Day) until and including the
Maturity Date.
The First Interest Payment Date is 18 March 2021.
RYMAN HEALTHCARE LIMITED
6
Interest payments and
entitlements
Payments of interest on the Interest Payment Dates will be of equal quarterly amounts.
On Interest Payment Dates interest will be paid to the person registered as the Bondholder as at the
record date immediately preceding the relevant Interest Payment Date.
The record date for the Interest Payment Dates is 5.00pm on the date that is 10 days before the relevant
Interest Payment Date. If the record date falls on a day which is not a Business Day, the record date will be
the immediately preceding Business Day.
Opening DateMonday, 7 December 2020.
Closing Date Thursday, 10 December 2020 at 1pm.
ScalingRyman may scale applications at its discretion, but will not scale any application to below
$5,000 or to an amount that is not a multiple of $1,000.
RefundsIf Ryman does not accept your application (whether because of late receipt or otherwise) or accepts
it in part, all or the relevant balance of your application money received will be repaid to you as soon as
practicable and, in any event, within 5 Business Days of the Issue Date.
Minimum application
amount
$5,000 and multiples of $1,000 thereafter.
How to applyApplication instructions are set out in section 11 (How to apply).
Ryman may refuse all or any part of any application for Bonds under the Offer without giving a reason.
QuotationApplication has been made to NZX for permission to quote the Bonds on the NZX Debt Market and all
the requirements of NZX relating to that quotation that can be complied with on or before the date of
distribution of this PDS have been duly complied with. However, the Bonds have not yet been approved
for trading and NZX accepts no responsibility for any statement in this PDS. NZX is a licensed market
operator, and the NZX Debt Market is a licensed market, under the FMCA.
NZX ticker code RYM010 has been reserved for the Bonds.
BrokerageRyman will pay brokerage to market participants in respect of the Offer.
You are not required to pay brokerage or any other fees or charges to Ryman to purchase the Bonds.
However, you may have to pay brokerage to the firm from whom you receive an allocation of Bonds.
Please contact your broker for further information on any brokerage fees.
Transfer restrictionsRyman may decline to accept or register a transfer of the Bonds if the transfer would result in the
transferor or the transferee holding or continuing to hold Bonds with a Principal Amount of less than
$5,000 (if not zero) or if the transfer is not in multiples of $1,000.
RankingThe Bonds rank equally with Ryman’s other secured, unsubordinated creditors, including Ryman’s bank
lenders and any other debt funding providers who become Beneficiaries under the Security Trust Deed,
and have the benefit of the Security given by the Guaranteeing Group. This means that if Ryman goes
into liquidation the Bonds will rank:
• below, and be repaid after, creditors preferred by law and any limited permitted security interest
(such as security arising by law);
• equally with, and be repaid at the same time and pro-rata with, all other liabilities secured under
the Security Trust Deed, such as other Bondholders, Ryman’s bank lenders under the Bank Facility
Agreement and any other debt funding providers who become Beneficiaries under the Security
Trust Deed; and
• ahead of, and would be repaid before, any unsecured creditors and shareholders of Ryman.
Further information on how the Bonds rank for repayment on a liquidation of the Ryman Group, the
securities held by the Statutory Supervisor, the Resident Mortgage and their ranking can be found in
section 5 (Key features of the Bonds).
Guarantee and
Security
Bondholders will share the benefit of the same Guarantee and Security as the Ryman Group’s bank
lenders and any other debt funding providers who become Beneficiaries under the Security Trust Deed
on a pro-rata basis, being:
• the cross guarantee contained in the Security Trust Deed provided by (as at the date of this PDS)
each member of the Ryman Group;
• first ranking registered mortgages over:
• all land and buildings owned by NZ Guarantors that are not NZ Village Companies. This includes bare
land and land that is under development and not yet used for operational retirement villages; and
• any land and buildings owned by NZ Guarantors that are NZ Village Companies which are on separate
legal titles to any land allocated for Units. This generally includes hospital facilities, Community
Facilities and care centres (but only if that care centre does not contain any Care Suites);
• second ranking registered mortgages over the care centre of any NZ Village Company, but only if
that care centre includes any Care Suites; and
• general security over all the assets of each Guarantor under the General Security Agreements and
Guarantee. This includes security over the shares held by Ryman in Village Companies.
RYMAN HEALTHCARE LIMITED
7
The purpose of the Offer is to provide diversity of funding sources and tenor, and the proceeds of the Offer will be used to repay a
portion of Ryman’s existing bank debt. This will provide Ryman with additional headroom under the Bank Facility Agreement which
it can drawdown as required.
The use of the money raised under the Offer will not change depending on the total amount that is raised.
The Offer is not underwritten.
Purpose of the Offer4
Guarantee and
Security (continued)
More information on the Guarantee and the Security can be found in section 5 of this PDS (Key features
of the Bonds).
Financial covenantsRyman must ensure at all times that:
Debt to Equity Covenant – the ratio of Total Liabilities of the Ryman Group (after deducting the
aggregate value of all Resident Occupancy Advances, Australian Resident Loans and Accommodation
Bonds owing or held by the Ryman Group) to Net Tangible Assets of the Ryman Group is no greater than
1.0:1.0; and
As at 30 September 2020 this ratio was 0.81:1.0 (giving headroom of $454.75m).
Guaranteeing Group Coverage Covenant – the Total Tangible Assets and Adjusted EBIT of the
Guaranteeing Group must represent not less than 90% of the Total Tangible Assets and Adjusted EBIT
of the Ryman Group taken as a whole.
As at the date of this PDS, all members of the Ryman Group are Guarantors.
Under the Trust Deed these financial covenants are subject to change but only where the equivalent
covenant in the Bank Facility Agreement is changed and Ryman has certified to the Supervisor that
the change is more favourable to the Bondholders (if it applied to the Bondholders) than the relevant
financial covenant.
See section 5 of this PDS (Key features of the Bonds) for further information about these covenants.
Early redemptionNeither you nor Ryman are able to redeem the Bonds before the Maturity Date. However, Ryman may
be required to repay the Bonds early if there is an Event of Default (as described below).
Events of DefaultIf an Event of Default occurs, and is continuing, the Bond Supervisor may, and must upon being directed
to do so by an Extraordinary Resolution (or, if certain Events of Default occur), declare the Bonds to be
immediately due and payable.
The Events of Default are set out in condition 18.1 of Schedule 1 to the Trust Deed, a copy of which is
contained on the Disclose Register and are summarised in section 5 (Key features of the Bonds).
Further payments,
fees or charges
Taxes may be deducted from interest payments on the Bonds. See section 7 (Ta x) for further details.
No underwritingThe Offer is not underwritten.
Selling restrictionsThe 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 5 (Key features of the Bonds).
Bond SupervisorPublic Trust
Security TrusteeNew Zealand Permanent Trustees Limited
Securities RegistrarLink Market Services Limited
No relianceNone of the Bond Supervisor, the Arranger or any Joint Lead Manager, nor their respective directors,
employees, agents or advisers have independently verified the information contained in the PDS or
the Disclose Register.
Governing lawNew Zealand
Trust Deed and Guarantee
The terms of the Bonds, and other terms key to the Offer, are set out in:
• the Trust Deed, as supplemented by the Supplemental Deed;
• the Security Trust Deed (including the Guarantee); and
• the Security.
You should read these documents. Copies of these documents may be obtained from the Disclose Register at
www.companiesoffice.govt.nz/disclose.
RYMAN HEALTHCARE LIMITED
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A number of key features of the Bonds are described in section 3 (Terms of the Offer). The other key features of the Bonds are
described below.
Ranking and Security
The Guaranteeing Group
As the issuer of the Bonds, Ryman is responsible for repaying, and paying interest on, the Bonds.
Payments on the Bonds are guaranteed by the Guarantors under the Guarantee contained in the Security Trust Deed. As at the
date of this PDS all members of the Ryman Group are Guarantors (although Ryman itself is the person responsible for repaying
and paying interest on the Bonds, so is not a guarantor of the Bonds).
Ryman Group Security Structure – as at 30 September 2020
Key features of the Bonds
5
Bond Supervisor
Banks
Statutory
Supervisor
/ Resident
Mortgage
Statutory
change
Security Trustee
Ryman Group
Total assets: $8.34b
Ryman Healthcare
(Australia) Pty Ltd
Total assets: $72.9m
Ryman Aged Care
(Australia) Pty Ltd
Total assets: $1.5m
NZ Subsidiaries
that are non-Village
Companies
Total assets: $78.7m
Ryman Construction
Pty Ltd
Total assets: Nil
NZ Village
Companies
Total assets: $6.65b
Other Australian non-
Village Companies
Total assets: $197.2m
100%
100%
100% in each
100%
100% in each
100% in each100% in each
Guaranteeing Group
Note: Assets of each entity exclude shares held by that entity in subsidiaries of that entity and
intercompany loan balances within the Guaranteeing Group.
Ryman Healthcare Limited
Listed bond issuer
Total assets: $381m
Australian Village
Companies
Total assets: $959.1m
RYMAN HEALTHCARE LIMITED
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Each Guarantor (other than Ryman) is 100% owned by Ryman. The Guarantors (other than Ryman) fall within the following
three categories:
1. Subsidiaries that operate a retirement village which is registered under the NZ RV Act i.e. NZ Village Companies;
2. Subsidiaries that operate and/or own a retirement village which is registered under the Australian RV Act i.e. Australian
Village Companies; or
3. Subsidiaries that are not NZ Village Companies or Australian Village Companies, including:
(i) Subsidiaries that hold bare land and/or land that is under development and not yet used for operational
retirement villages;
(ii) Ryman Healthcare (Australia) Pty Ltd ACN 142 241 110 (which is the holding company of the Ryman Group in Australia);
(iii) Ryman Construction Pty Ltd ACN 639 119 681 (which undertakes the Ryman Group’s construction activities in
Australia); and
(iv) Ryman Aged Care (Australia) Pty Ltd ACN 152 245 988 (which is the Ryman Group’s provider of aged care in its
Australian villages).
If a Subsidiary which is not a Village Company builds a retirement village and registers that village under the:
• NZ RV Act, it becomes a NZ Village Company; or
• Australian RV Act, it becomes an Australian Village Company.
Further information on the Guaranteeing Group can be found under the heading “Guarantees” below on page 16.
Ranking
The ranking of the Bonds on a liquidation of the Ryman Group is summarised in the diagram below. The diagram is a summary
of indicative amounts only and in the event of a liquidation of the Ryman Group, the actual priority amounts may differ.
Ranking on
liquidation
Type of liability/equityAmount
1
Higher ranking /
Earlier priority
Lower ranking /
Later priority
Liabilities that rank
above the Bonds
Liabilities preferred by law (for example,
Inland Revenue for certain unpaid taxes)
2
Permitted secured liabilities (other than liabilities
to the Statutory Supervisor)
3
Liabilities secured by the Statutory Supervisor’s
Mortgage, the Resident Mortgage (including
amounts owing to Residents of a Village)
4
and
the Statutory Charge
5
$29 million
$14 million
$3,368 million
Liabilities that
rank equally with
the Bonds
6
Bonds
Other unsubordinated liabilities that have the benefit
of the Security, including Ryman’s bank debt
$150 million
$1,980 million
Liabilities that
rank below
the Bonds
Unsubordinated and unsecured
liabilities
7
Subordinated liabilities
$247 million
Nil
Equity
6
Shares, reserves and retained earnings$2,454 million
Diagram showing ranking of Bonds on liquidation of the Ryman Group
Notes:
1 Amounts shown above are indicative amounts based on the financial position of the Ryman Group as at 30 September 2020, adjusted
for the issue of the Bonds. They are subject to rounding adjustments.
2 Liabilities that rank above the Bonds on a liquidation of the Ryman Group include employee entitlements for unpaid salaries and wages,
holiday pay, bonuses and PAYE, and amounts owing to the Inland Revenue for unpaid taxes and goods and services tax. There are
typically other liabilities which are preferred by law or secured, including enforcement costs and similar, which arise when a company is in
liquidation which are not possible to foresee and cannot therefore be quantified.
3 Other permitted secured liabilities include those secured over particular assets under a perfected purchase money security interest,
such as finance leases and title retention arrangements. These are shown as ranking above the Bonds for reasons of simplicity, as on
liquidation the secured party in relation to a perfected purchase money security interest has first rights to the particular asset or its
sale proceeds.
RYMAN HEALTHCARE LIMITED
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Additional debt funding
As at 24 November 2020, the limit of the facilities available
under the Bank Facility Agreement is $2,395m. To further
diversify sources and tenor of debt funding, Ryman is
investigating a number of additional debt funding options,
including an issue of USPP notes and other arrangements with
institutional lenders. These transactions may be completed
relatively soon after the date of this PDS.
While details of such funding arrangements have not been
confirmed as at the date of this PDS:
• as the proceeds of such funding are intended to be solely
used to repay a portion of Ryman’s existing bank debt, it is
not expected that such additional funding will itself result in
an increase in Ryman’s total liabilities; and
• it is expected that the providers of such debt funding will
be Beneficiaries entitled to the benefit of the Security
under the Security Trust Deed (and will rank equally for
repayment with the Bonds).
The Security Trustee
The Security Trustee (currently New Zealand Permanent
Trustees Limited) holds the Security for all creditors entitled
to the benefit of the Security under the Security Trust Deed.
As at the date of this PDS the creditors entitled to the benefit
of the Security include (in addition to the Bond Supervisor and
Bondholders) the Security Trustee, Ryman’s banks and the
Agent (as agent of the banks in relation to the bank lending).
It is likely that further creditors will become entitled to the
benefit of the Security in the future, and/or that the total amount
of debt secured by the Security will increase. For example,
Ryman may drawdown additional funds from time to time under
the Bank Facility Agreement, obtain additional debt funding
or undertake further bond issuances. Ryman is investigating
a number of additional debt funding options. See the section
above headed “Additional debt funding”.
The Statutory Supervisor is not a “Beneficiary” under the
Security Trust Deed.
The basis on which the Security Trustee holds the Security, and
otherwise acts for the Beneficiaries, is set out in the Security
Trust Deed. More information on the Security Trust Deed is set
out below under the heading “Security Trust Deed”.
The Statutory Supervisor
Under the NZ RV Act every operator of a retirement village
in New Zealand must appoint a licensed statutory supervisor
of that village. Anchorage Trustee Services Limited is the
Statutory Supervisor of every NZ Village.
Pursuant to informal arrangements with Ryman, the Statutory
Supervisor also acts as “Resident advocate” in respect of
each Australian Village (under which Residents may raise
complaints directly with the Statutory Supervisor) but the
Statutory Supervisor has no statutory role or powers in
respect of the Ryman Group’s Australian Villages.
The role of the Statutory Supervisor in New Zealand is to
protect the interests of Residents of the relevant Village. More
detail in relation to the Statutory Supervisor and its rights
and powers is set out below under the heading “Statutory
Supervisor’s Mortgage and memorial”.
The Bond Supervisor
The Bond Supervisor is appointed to act as supervisor and
trustee for Bondholders on the terms contained in the Trust
Deed. As at the date of this PDS, the Bond Supervisor is
Public Trust.
You can only enforce your rights under the Bonds, or under
the Guarantee and Security, through the Bond Supervisor.
However you can enforce your rights under the Bonds (but
not the Guarantee or Security) against Ryman directly if the
Bond Supervisor is obliged to enforce but has failed to do so
within a reasonable period.
The Security
The Bonds rank equally with the liabilities owed by the
Ryman Group to the Beneficiaries including Ryman’s
bank lenders and any other debt funding providers who
become Beneficiaries under the Security Trust Deed. The
Bondholders (and the other Beneficiaries) have the benefit
of the Guarantee and Security provided by the Guaranteeing
Group to the Security Trustee described below:
4 On liquidation, the Statutory Supervisor is entitled to be paid in priority to the Security Trustee all amounts owing to the Statutory
Supervisor (including legal fees and expenses) other than amounts owing to the Statutory Supervisor on behalf of New Zealand
Residents. But the Statutory Supervisor also has first rights to the proceeds of security enforcement relating to the assets subject to
the Statutory Supervisor’s Mortgage or a Resident Mortgage (in respect of amounts owing to the Statutory Supervisor on behalf of
New Zealand Residents). Ryman Group members that are not Village Companies are not liable for amounts owing to Residents.
The amount owing to Residents of a Village may increase over time where: (1) more Units and Care Suites are developed; and/or (2) an
Occupation Agreement is entered into with a new Resident for a higher price than the price for which it was sold to the previous Resident.
5 Each Resident of an Australian Village Company has the benefit of a Statutory Charge over the land of the relevant Australian Village
Company to secure that company’s obligation to repay the Australian Resident Loan paid by that Resident. This charge ranks ahead of
the general security held by the Security Trustee over the assets of the Australian Village Company.
6 Assuming $150 million of Bonds are issued under the Offer. The final size of the Offer will not materially impact the other unsubordinated
liabilities number as the proceeds of the Offer will be applied towards repaying a portion of bank debt which ranks equally with the
Bonds.
7 Unsubordinated and unsecured liabilities of the Ryman Group are shown as ranking behind the Bonds because, although these amounts
are not legally subordinated to the Bonds (or other secured debt), they do not have the benefit of the Security. In effect the Bonds (and
other secured debt, including bank debt and any other debt funding providers who become Beneficiaries under the Security Trust Deed)
would have priority over unsubordinated and unsecured liabilities if the Security was enforced, to the extent of the proceeds of the
Security Trustee’s Security to which the Security Trustee is entitled under each Security Sharing Deed.
8 The amount of equity stated above includes an amount in relation to Ryman’s existing quoted equity securities (i.e. Ryman’s
ordinary shares).
RYMAN HEALTHCARE LIMITED
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Details of the Security (based on the financial position of Ryman as at 30 September 2020, as adjusted for expected issue
proceeds of $150 million) are:
(a) the Guarantee described under the heading
“Guarantees” below;
(b) the General Security Agreements;
(c) first ranking registered mortgages over:
(i) all land and buildings owned by NZ Guarantors that are
not NZ Village Companies. This includes bare land and
land that is under development and not yet used for an
operational retirement village; and
(ii) all land and buildings owned by NZ Guarantors that
are NZ Village Companies which are on separate legal
titles to any land allocated for Units. This generally
includes hospital facilities, Community Facilities and
care centres but only if that care centre does not
contain any Care Suites (paragraph (d) below applies
where the care centre contains Care Suites); and
(d) second ranking registered mortgages over the care
centre of any NZ Village Company, but only if that care
centre includes any Care Suites.
The Beneficiaries do not have the benefit of any registered
mortgages in respect of land and buildings owned by an
Australian Guarantor. But the Security Trustee has an
unregistered security interest in each Australian Subsidiary’s
land holdings under the general security (which will rank
behind the Statutory Charge).
Ryman estimates that as at 30 September 2020:
• The total amount of liabilities secured by the Security was
approximately $2,130m, with all Beneficiaries under the
Security Trust Deed ranking equally. The issue of the Bonds
will not materially impact this amount, as the proceeds of
the issue will be used to repay existing bank debt which also
has the benefit of the Security.
• The total value of the Ryman Group’s assets available as
Security, after deducting amounts preferred by law and
amounts owing to the Statutory Supervisor and under the
Resident Mortgage and Statutory Charge and liabilities that
rank ahead of the Bonds, was $4,927m.
GUARANTORS
Security
Information
NZ Village CompaniesAustralian Village
Companies
Subsidiaries that
are not Village
Companies
with land
Subsidiaries
that are
not Village
Companies
without land
Assets
subject to
Security
Land and buildings are subject to the Security
Trustee’s Mortgages
All assets are subject to the NZ General
Security Agreement
All assets are subject to
the Australian General
Security Agreements (but
there are no registered
mortgages over land)
Land and buildings of
NZ Guarantors only
are subject to the
Security Trustee’s
Mortgages
All assets of the
Guarantors are
subject to the
General Security
Agreements
All assets are
subject to
the relevant
General
Security
Agreements
(but any
assets are
likely to be
minimal)
Nature of
Security
First ranking registered mortgages over land and
buildings owned by NZ Village Companies which
are on separate legal titles to any land allocated for
Units. This generally includes care centres (but only
if that care centre does not contain any Care Suites),
hospital facilities and Community Facilities
1
A second ranking mortgage over the land on which
a care centre of any NZ Village Company is located
where the care centre includes Care Suites
General Security Agreements (to the extent it relates
to a Unit or the land on which a Unit is located, the
Statutory Supervisor has first rights to the proceeds
of security enforcement to which the Security Trustee
is entitled)
General Security
Agreements
First ranking
registered
mortgages over land
and buildings owned
by NZ Guarantors
only
1
General Security
Agreements
General
Security
Agreements
Total value
of assets
available as
Security
$7,028m before deducting amounts owing
to the Statutory Supervisor
2
and under the
Resident Mortgage
$959m before deducting
amounts owing under the
Statutory Charge
3
$276m$74 m
$4,023m after deducting amounts owing to
the Statutory Supervisor
2
and under the
Resident Mortgage
$596m after deducting
amounts owing under the
Statutory Charge
3
RYMAN HEALTHCARE LIMITED
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New Zealand – Statutory Supervisor’s
Mortgage and memorial
New residents moving into a Unit at a Ryman Group NZ
Village must enter into an Occupation Agreement. Under
an Occupation Agreement a Resident receives the right to
occupy their Unit for life in exchange for paying the Occupancy
Advance to the relevant Village Company. Legal ownership of
the Unit remains with the relevant Village Company.
Some Village Companies offer Care Suites in a NZ Village
Company’s care centre. Each Care Suite Resident will receive
the right to occupy a Care Suite in a care centre for life in
exchange for paying the Occupancy Advance to the relevant
Village Company. Legal ownership of the Care Suite will remain
with the relevant Village Company.
The Occupancy Advance received by the relevant Village
Company is treated as a loan to the relevant Village Company
under NZ GAAP. However, no interest is payable by the
relevant Village Company on the Occupancy Advance, and the
relevant Village Company is generally only obliged to repay the
Occupancy Advance (less the deductions described below)
when the Resident leaves their Unit and the relevant Village
Company has entered into an Occupation Agreement for that
Unit with a new resident and the new Occupancy Advance has
been received. A Care Suite Resident must be repaid his or her
Occupancy Advance within 30 working days of the Resident
leaving their Care Suite.
The relevant Village Company is entitled to make certain
deductions when it is repaying a Resident’s Occupancy
Advance. The main deduction is a deferred management fee
that is calculated as a percentage of the Occupancy Advance
for Units (up to a maximum of 20%). No deferred management
fee is payable for Care Suites.
The Statutory Supervisor’s Mortgage
The Statutory Supervisor’s Mortgage secures the NZ Village
Companies’ obligations under, and any amounts owing by the
relevant NZ Village Company to the Statutory Supervisor or
any Resident (such as repayment of the residual Occupancy
Advance) under the Deed of Supervision, any Occupation
Agreement or the Statutory Supervisor’s Mortgage. The
Statutory Supervisor does not hold any guarantee or security
from any Australian member of the Ryman Group.
Bondholders do not have the benefit of the Statutory
Supervisor’s Mortgage.
Existing Resident’s security
The security position is different in respect of Occupation
Agreements entered into with Residents prior to 1 September
2014. Prior to this date Residents, on providing an Occupancy
Advance to the NZ Village Company, were granted:
• a Life Title for the Resident’s Unit which remained in place
during the lifetime of the Resident; and
• a Resident Mortgage registered against the NZ Village
Company’s reversionary interest in the land on which the
Resident’s Unit was situated. The Resident Mortgage is
discharged at the time the Resident’s Occupancy Advance
is repaid by the NZ Village Company.
Ryman stopped granting Life Titles and Resident Mortgages
on 1 September 2014, but Resident Mortgages are in place as
at the date of this PDS in respect of Residents who entered
into an Occupation Agreement prior to 1 September 2014
who remain in the Unit to which that Occupation Agreement
relates. The obligations of a NZ Village Company to Residents
under Occupation Agreements entered into between a NZ
Village Company and Residents on and from 1 September 2014
(including the obligation to repay the Resident’s Occupancy
Advance) are secured by the Statutory Supervisor’s Mortgage
and no Life Title or Resident Mortgage is put in place.
The Statutory Supervisor’s Mortgages are granted on a “village
by village” basis. This means that the Statutory Supervisor’s
Mortgage in respect of each NZ Village Company only secures
amounts owing to the Statutory Supervisor and Residents in
relation to that particular Village. It does not secure amounts
owing in relation to other Villages.
Memorial protections for Residents
In addition to the Statutory Supervisor’s Mortgages, the NZ
RV Act requires a memorial to be placed on the title of any
property that forms part of the Village (i.e. property containing
Units or Care Suites) that is owned or leased by a NZ Village
Company. This memorial gives Residents security of tenure
to occupy their Unit for life even if the relevant NZ Village
Company becomes insolvent. This means that, unless all
Residents of the Village have received independent legal advice
and at least 90% of those Residents have consented in writing,
the holder of a security interest or any receiver, liquidator or
statutory manager of property comprising the Village or of any
NZ Village Company must not:
• dispose of the NZ Village other than as a going concern;
• disclaim any Occupation Agreement relating to that NZ
Village as onerous property; or
• evict any Resident or exclude any Resident from the use
of any facilities or any part of the NZ Village to which that
Resident is ordinarily entitled.
Security sharing and ranking with Statutory
Supervisor’s Mortgage
The Security Trust Deed contains the rules regarding the
distribution of proceeds received in respect of the Security on
enforcement between Beneficiaries (see the section headed
“Security Trust Deed” on page 15 of this PDS).
1
The priority amount is the maximum amount for which the Security Trustee’s Mortgages will have priority over any subsequent mortgage
relating to the relevant property. The priority amount in each mortgage is different and depends on when the mortgage was granted.
2
The Statutory Supervisor has a first ranking registered mortgage over all land and buildings owned by a NZ Village Company containing
Units (other than a NZ Village Company’s interest in the Units against which a Resident Mortgage has been registered). This is discussed
under the heading “New Zealand – Statutory Supervisor’s Mortgage and memorial” below.
3
Each Resident of an Australian Village Company has the benefit of a Statutory Charge over the relevant Australian Village Company’s
land to secure repayment of the Resident’s Australian Resident Loan. This is discussed under the heading “Statutory Charge” below.
RYMAN HEALTHCARE LIMITED
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These arrangements are subject to the Security Sharing Deed
arrangements set out below.
Under the terms of each Security Sharing Deed, the Statutory
Supervisor and the Security Trustee agree that:
(a) the Security Trustee’s NZ GSA (to the extent it relates to a
Unit or the land on which a Unit is located) and the Security
Trustee’s Care Centre Land Mortgage, each ranks behind
the Statutory Supervisor’s Mortgage;
(b) all proceeds of enforcement received under the Security
Trustee’s NZ GSA and/or the Security Trustee Mortgages
and the Statutory Supervisor’s Mortgage will be applied
as follows:
Before Bondholders and other Beneficiaries
(i) first, in payment of all reasonable costs and
expenses incurred by the Security Trustee or
Statutory Supervisor in exercising their powers under
their relevant securities;
(ii) secondly, in payment of all moneys owing to the
Statutory Supervisor including its fees and legal
expenses (other than amounts owing under the
following point);
(iii) thirdly, to the extent that proceeds relate to a Unit,
the land on which the Unit is located and/or land on
which a care centre is located (but only where that
care centre includes any Care Suites), in payment
of all moneys owing to any Resident under
Occupation Agreements in respect of such Units
and/or Care Suites, Deed of Supervision relating
to that Village, Resident Mortgage or Statutory
Supervisor Mortgage;
Bondholders and other Beneficiaries
(iv) fourthly, in payment to the Security Trustee of all
amounts owing under the Security – this includes the
amounts owing under the Bonds, the bank facilities
and any other debt funding providers who become
Beneficiaries under the Security Trust Deed. These
proceeds will be shared between the Beneficiaries
on a pro-rata basis (see the section headed “Security
Trust Deed” on page 15 for further information); and
After Bondholders and other Beneficiaries
(v) fifthly, in payment of any surplus to the NZ Village
Company or to such other person that has a prior
claim on such surplus.
The Security held by the Security Trustee is also subject to the
rights of Residents and the Statutory Supervisor under each
Occupation Agreement entered into by a NZ Village Company,
each Resident Mortgage and the Statutory Supervisor’s
Mortgage and to the Statutory Supervisor’s rights and benefits
under the Deed of Supervision.
To enable the Resident Mortgage and the Statutory
Supervisor’s Mortgage to be first-ranking securities, the
Security Trustee under each Security Sharing Deed:
• waives its rights and remedies under the NZ GSA for each
Unit that is subject to an Occupation Agreement once
the relevant NZ Village Company has paid the net sale
proceeds from the sale of the occupation rights to a Unit
to the Security Trustee in accordance with the relevant
Security Sharing Deed until the relevant Occupation
Agreement is at an end and the relevant Occupancy
Advance has been repaid;
• agrees, that if Care Suites are designated in a Village in
New Zealand where the Security Trustee has a first ranking
mortgage over the care centre, the Security Trustee’s
mortgage is subordinated and becomes a second-ranking
mortgage behind the Statutory Supervisor’s Mortgages;
and
• subordinates its rights in respect of each Unit and Care
Suite (as applicable) under the NZ GSA behind the Resident
Mortgage and the Statutory Supervisor’s Mortgage and
agrees to only exercise its rights and powers under the NZ
GSA subject to the rights of Residents and the Statutory
Supervisor under the Occupation Agreements, Resident
Mortgage and Statutory Supervisor’s Mortgage.
Australia – Statutory Charge
In Australia, when a Resident pays an amount in consideration
of the right to become a Resident in a Retirement Village
where part of that amount is refundable when the Resident
leaves the village, the Resident has the benefit of a Statutory
Charge under the Australian RV Act over the land of the
relevant Australian Village Company to secure repayment of
the refundable component. The relevant Australian Village
Company is obliged to repay an Australian Resident Loan (less
any applicable deductions) within six months after the Resident
permanently vacates their Unit, (noting the relevant Australian
Village Company is obliged to repay earlier if the Unit is sold
and settled within the 6 month period).
The Statutory Charge applies regardless of whether
or not it is registered against the title to the land of the
Australian Village Company and takes priority over the
Security Trustee’s Security.
Where funds have been received from Residents or
prospective residents, Statutory Charges have been
registered on the titles to all of the Ryman Group’s Australian
Village Companies.
The Australian RV Act also provides a mechanism for the
enforcement of a Statutory Charge.
A Resident may apply to the Supreme Court for an order for
the enforcement of a Statutory Charge if the Resident has:
• brought proceedings against the owner of the land for
recovery of the refundable component of the Resident’s
Australian Resident Loan;
• obtained judgement; and
• attempted to execute the judgment,
but has been unable to recover the amount judged to be
refundable from the Resident’s Australian Resident Loan.
To make an order for enforcement, the Court must be satisfied
that the order is in the interests of all Residents of the relevant
Village. If an order is granted it must provide for (amongst other
things) the sale of the land subject to the Statutory Charge.
The sale proceeds would be applied towards payment of the
amounts owing to Residents in priority to amounts owing to the
Security Trustee.
Further borrowing and security
After the issue of the Bonds, the Ryman Group may (without
the consent of Bondholders) borrow money or otherwise incur
liabilities that:
RYMAN HEALTHCARE LIMITED
14
• rank equally with the Bonds on a liquidation of the Ryman
Group. This may include, for example, further bank or other
debt funding, or the issue of USPP notes or further bonds; or
• rank above the Bonds on a liquidation of the Ryman
Group. This may include, for example, other borrowings
with permitted security as described below and liabilities
preferred by law.
Also, the amounts owing to Residents by Village Companies
and secured by the Statutory Supervisor’s Security or the
Statutory Charge may increase over time. These amounts rank
ahead of the Bonds. Village Companies may also incur liabilities
to other parties from time to time.
The financial covenants and other terms described below limit
the ability of the Ryman Group to:
• borrow money that ranks equally with, or above, the
Bonds; or
• grant security which ranks equally with, or above,
the Security.
Restrictions on borrowing
Trust Deed
Under the Trust Deed, Ryman must ensure at all times that the
ratio of Total Liabilities of the Ryman Group (after deducting
the total value of Resident Occupancy Advances, Australian
Resident Loans and Accommodation Bonds owing or held by
the Group) to Net Tangible Assets of the Ryman Group is no
greater than 1.0:1.0 (the Debt to Equity Covenant).
This covenant is also contained in the Bank Facility Agreement.
If there is a breach of the Debt to Equity Covenant, Ryman
must, within 6 months of the date of a 6 monthly compliance
report being delivered specifying that breach (or the date on
which it should have been delivered, if earlier) remedy the
breach or (if not remedied within 6 months) give notice to the
Bond Supervisor within 20 Business Days after such date of its
plan to remedy the breach. If the breach is not remedied within
6 months of the date of that notice (or the date on which it
should have been delivered, if earlier), an Event of Default
will occur.
Therefore a continued breach of the Debt to Equity Covenant
will be an Event of Default approximately 13 months after that
breach is disclosed to the Bond Supervisor in the 6 monthly
compliance report.
Bank Facility Agreement
Certain terms under the Bank Facility Agreement limit the
ability of the Ryman Group to borrow money (although
Bondholders do not have the benefit of these, and they
may be amended or waived by the Banks). If these terms are
breached, an event of default would occur under the Bank
Facility Agreement (subject to certain grace periods). These
terms include:
• a minimum “interest cover ratio” (this is a measure of the
Guaranteeing Group’s ability to meet its interest payments
and measures the Ryman Group’s Adjusted EBIT against
the Ryman Group’s Interest Expense) for Ryman’s financial
year to date must be more than 2.25:1.0 at all times;
• a minimum “debt to equity” ratio and “guaranteeing group
coverage” ratio which is the same as the Debt to Equity
Covenant and the Guaranteeing Group Coverage Covenant
in the Trust Deed;
• restrictions on Financial Indebtedness. The Ryman Group
can only incur Financial Indebtedness to the extent
permitted under the Bank Facility Agreement. Financial
indebtedness is permitted:
• between members of the Guaranteeing Group;
• if it is a loan or ingoing contribution provided by a
Resident to a Village Company in connection with an
Occupation Agreement (e.g. Occupancy Advances);
• if it is an Approved Lender Facility (Ryman may give
notice to the Security Trustee under the Security
Trust Deed designating a loan, other debt or financial
accommodation (including the issue of bonds) as an
Approved Lender Facility);
• if incurred with the Agent’s prior written consent; and
• in certain other limited circumstances permitted under
the Bank Facility Agreement.
Restrictions on granting security
Restrictions under each Security Sharing Deed
Under each Security Sharing Deed each NZ Village Company
has agreed in favour of the Security Trustee, not to grant or
permit any further security over any of its land or assets without
the Security Trustee’s prior written consent (other than the
Statutory Supervisor’s Mortgage).
Restrictions under the Trust Deed
Under the Trust Deed, Ryman has agreed that it will not, and
will ensure that each Guarantor does not, without the Bond
Supervisor’s prior written consent create or permit to exist any
security interest over the whole or any part of its assets, except
as expressly permitted by the Trust Deed as permitted security
interests. These permitted security interests include:
• securities in favour of the Statutory Supervisor;
• any charge or other encumbrance in favour of a Resident
of a Village that is created or required under any legislation
regulating retirement villages;
• securities approved by the Bond Supervisor;
• security arising by the operation of law; and
• security interests under which the aggregate principal
amount secured when aggregated with the principal
amount secured under all security interests relying on
this exception, does not exceed 5% of the Total Tangible
Assets of the Ryman Group (this is in addition to the other
permitted security interests).
This summary does not cover all of the permitted security
interests. For full details see the definition of “Permitted
Security Interests” in condition 22 of the Trust Deed.
Restrictions under the Bank Facility Agreement
Under the Bank Facility Agreement Ryman agrees that it will
not, and will ensure no member of the Guaranteeing Group will
(without the Agent’s prior written consent) create or permit to
exist any security over its assets, except in limited permitted
circumstances which include:
• security arising by operation of law;
RYMAN HEALTHCARE LIMITED
15
• the Statutory Supervisor’s Mortgage and Resident
Mortgage and any other charge or encumbrance in
favour of a Resident of a Village that is created under any
legislation regulating retirement villages;
• netting and set-off arrangements entered into in the
ordinary course of banking arrangements;
• any security not otherwise permitted which, when
aggregated with the principal amount secured under all
security interests relying on this exception, does not exceed
5% of Total Tangible Assets of the Ryman Group; and
• certain other limited circumstances set out in the Bank
Facility Agreement.
Restrictions under Occupation Agreements
Under each New Zealand Occupation Agreement for Units
each NZ Village Company agrees with Residents:
• not to offer security over a Resident’s Unit to any bank or
other lender during the term of the relevant New Zealand
Occupation Agreement; and
• not to charge, pledge or encumber the Resident’s Life Title
to the Residents’ detriment.
Restrictions under Deed of Supervision
Under its Deed of Supervision, each NZ Village Company needs
the Statutory Supervisor’s prior written consent (such consent
cannot be unreasonably withheld) to:
• give guarantees in respect of the obligations of any third
party; or
• grant any security over any of its assets relating to a NZ
Village Company.
Bondholders are not able to enforce these restrictions.
Security Trust Deed
Sharing of Security proceeds between Beneficiaries
The Security Trust Deed contains the rules regarding the
distribution of proceeds received by the Security Trustee on
enforcement of the Security. These are subject to the security
arrangements in each Security Sharing Deed.
In short, funds received by the Security Trustee are payable
first to fees and costs (including those of the Security Trustee
and/or any receiver) and to any creditors that have a statutory
preference (including the Statutory Supervisor) and then to the
Beneficiaries (including Bondholders) under the Security Trust
Deed on a pro-rata basis (based on the total amount owing to
each Beneficiary).
Enforcement of Security
The Security Trust Deed sets out how the Security can be
enforced by the Bond Supervisor and other Beneficiaries.
If default is a “Major Default” and there are no USPP notes
issued and outstanding
If:
(a) there is a default event under the Trust Deed which is
a “Major Default” under the Security Trust Deed (this
includes a default relating to late payment on the Bonds,
an insolvency event or default by a Guarantor under any
financial covenant in any Financing Document (as defined
in the Security Trust Deed)); and
(b) no USPP notes are issued and outstanding,
the Bond Supervisor can, if that Major Default has not been
remedied within 5 Business Days, instruct the Security Trustee
on the enforcement steps it requires the Security Trustee to
take; or
If there is a default and USPP notes are issued and outstanding
If there is a default event under the Trust Deed when there are
USPP notes issued and outstanding (regardless of whether
or not that default is a “Major Default”) the Bond Supervisor
can instruct the Security Trustee on the enforcement steps it
requires the Security Trustee to take.
However, in both cases outlined above, if that default event
under the Trust Deed is:
(a) a Major Default under other funding arrangements that
have the benefit of the Security Trust Deed at a time when
no USPP notes are issued and outstanding; or
(b) if USPP notes are issued and outstanding, an event of
default under other funding arrangements that have the
benefit of the Security Trust Deed,
and other Beneficiaries give conflicting instructions to those
given by the Bond Supervisor in relation to how (but not
whether) the Security should be enforced, then the Security
Trustee must act on the instructions given by:
(a) if no USPP notes are issued and outstanding, the
Beneficiary or group of Beneficiaries giving instructions
to enforce with the greater aggregate principal amount
outstanding; and
(b) if USPP notes are issued and outstanding, the Majority
Beneficiaries, or if there are no instructions from the
Majority Beneficiaries, the Beneficiary or group of
Beneficiaries giving instructions to enforce with the greater
aggregate principal amount outstanding.
If the Bond Supervisor or any other instructing Beneficiary
requires the Security Trustee to enforce the Security,
the Security Trustee must do so (unless the instructing
Beneficiaries consent to the Security Trustee ceasing to take
enforcement action).
If default is not a “Major Default” and no USPP notes are issued
and outstanding
If no USPP notes are issued and outstanding and a default
event under the Trust Deed occurs which is not a Major Default,
the Beneficiaries must consult with each other to agree the
appropriate action in the circumstances to protect the mutual
interests of the Beneficiaries. Following such consultation, the
Majority Beneficiaries may give notice to the Security Trustee
setting out the enforcement steps the Security Trustee is
required to take.
As the Majority Beneficiaries are determined by the respective
principal amounts outstanding, Ryman’s banks currently
constitute the Majority Beneficiaries for the purposes of giving
instructions to the Security Trustee, and it is expected that they
will continue to do so after the Bonds are issued.
Limitations on Security Trustee’s ability to enforce Security
The Security Trustee’s ability to take enforcement action and
exercise other powers under the Security Trust Deed in relation
to NZ Village Companies is subject to each Security Sharing
Deed and Deed of Supervision and in relation to Australian
Village Companies the Statutory Charge. For example, under
the Deed of Supervision:
RYMAN HEALTHCARE LIMITED
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• if the Statutory Supervisor believes the financial position of
the relevant NZ Village, the security of the interests of the
Residents, or the management of the relevant NZ Village is
inadequate the Statutory Supervisor can:
• direct that Village how to operate; and/or
• apply for a court order under the NZ RV Act. Court orders
under this section could include:
• restrictions on the activities of that operator of the NZ
Village that the court considers necessary to protect
Residents’ interests;
• a prohibition on the NZ Village making further offers of
occupation;
• appointment of a receiver or manager of the assets of
the NZ Village; and
• restrictions on the transfer of any interest in all or part of
the NZ Village; and
• the Statutory Supervisor’s prior consent is required for a
number of activities, including:
• if the relevant operator wishes to dispose of the whole or
any part of a NZ Village;
• a change of control of a NZ Village or in the relevant
operator; or
• winding up a NZ Village.
Events of Default
The Events of Default are included in condition 18.1 of the Trust
Deed. They include:
• failure by Ryman to make a payment on the Bonds within
any applicable grace period;
• if a breach of the Debt to Equity Covenant is not
remedied within (approximately) 13 months of that breach
being disclosed to the Bond Supervisor in a 6 monthly
compliance report;
• a breach by Ryman of a material term of the Trust Deed or
the Bonds (including a breach of the Guaranteeing Group
Coverage Ratio), or by a member of the Ryman Group of
a material undertaking in the Security Trust Deed, each
Security Sharing Deed or the Security which (1) if capable
of being remedied, is not remedied within 30 days after
Ryman or a Ryman Group member becoming aware of
the breach; and (2) in the reasonable opinion of the Bond
Supervisor, is or is likely to be materially prejudicial to
Bondholders;
• material misrepresentation by any Guarantor under
the Trust Deed, the Bonds, the Security Trust Deed,
each Security Sharing Deed or the Security (subject to
applicable remedy periods);
• indebtedness of more than $10 million in respect of other
borrowed money of a Guarantor is declared to be due
and payable or cancelled or terminated prior to its stated
maturity date as a result of a default;
• insolvency events that affect a Guarantor;
• termination of the Security Trust Deed, each Security
Sharing Deed or the Security.
This summary does not cover all of the Events of Default.
If an Event of Default occurs, the Bond Supervisor may, in
its discretion, and must on being directed to do so by an
Extraordinary Resolution of Bondholders (or, if certain Events of
Default occur), declare the Principal Amount and any accrued
interest on the Bonds due and payable. If this occurs, Ryman
will need to repay the Principal Amount of the Bonds and any
outstanding interest due. Outstanding interest will be calculated
based on the number of days since the last Interest Payment
Date and the total number of days in the current Interest Period
based on an actual/actual day count convention basis.
Any enforcement of the Security must be by the Security
Trustee and not the Bond Supervisor.
Distribution stopper
While the Bond Supervisor does not have the benefit of a
distribution stopper in respect of a breach of the Debt to Equity
Covenant unless that breach becomes an Event of Default (as
described above), under the Bank Facility Agreement, Ryman
is not permitted to make a distribution if the ratio equivalent
to the Debt to Equity Covenant in that agreement is breached
(unless the lenders under the Bank Facility Agreement waive
their rights).
Guarantees
Ryman as Issuer is responsible for repaying, and paying interest
on, the Bonds.
Payments on the Bonds are guaranteed by the Guarantors
under the Guarantee in the Security Trust Deed. The
Guarantee is a cross guarantee. A cross guarantee is a
document under which each guarantor guarantees each
other guarantor’s liabilities. All Guarantors are members of the
Ryman Group and, as at the date of this PDS, all members of
the Ryman Group are Guarantors.
Ryman is a Guarantor under the Guarantee but as Issuer is not
a guarantor of the Bonds.
Not all members of the Ryman Group are required to be
Guarantors. Under the Guaranteeing Group Coverage
Covenant, Ryman must ensure that the Total Tangible Assets
and Adjusted EBIT of the Guaranteeing Group comprise at
least 90% of the Total Tangible Assets and Adjusted EBIT of
the Ryman Group as a whole.
Members of the Ryman Group may be added or removed as
Guarantors from time to time.
Any person that becomes a guarantor of the Bank Facility
Agreement under the Security Trust Deed will also become a
Guarantor of the Bonds.
Under the Security Trust Deed, each Guarantor guarantees
( jointly and severally) the payment of all amounts owed by
Ryman to Bondholders and any amount owed to the Bond
Supervisor (which would include the Bond Supervisor’s fees
and costs).
The Guarantee is not subject to any limits or conditions.
The Guarantee is secured by the Security as described above.
There is no limit on the amount secured by the Security.
Ryman believes that the assets that constitute the Security are
sufficient and are reasonably likely to be sufficient to:
• repay the liability under the Guarantee; and
• pay all other liabilities that a security interest over any of the
Security secures and that rank above, or equally with, the
liability under the Guarantee.
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Other relevant information about the Trust Deed
and Security Trust Deed
The Trust Deed for the Bonds contains a number of standard
provisions, including in relation to the powers and duties of the
Bond Supervisor, and the process for amending the Trust Deed.
In addition, the Security Trust Deed sets out how the Security
can be enforced and contains a number of other important
terms including the role, powers and duties of the Security
Trustee, and the procedure by which the Security may be
extended to additional creditors.
You can find a copy of the Trust Deed and the Security Trust
Deed on the Disclose Register. You should read these for
further information.
Selling Restrictions
Ryman does not intend that the Bonds be offered for sale, and
no action has been taken or will be taken to permit a public
offering of Bonds, in any jurisdiction other than New Zealand.
You may only offer for sale or sell any Bond in conformity with
all applicable laws and regulations in any jurisdiction in which
it is offered, sold or delivered. This PDS may not be published,
delivered or distributed in or from any country other than
New Zealand.
By subscribing for or otherwise acquiring any Bonds, you
agree to indemnify Ryman, the Bond Supervisor, the Arranger
and the Joint Lead Managers for any loss suffered as a result
of any breach by you of the selling restrictions referred to in
this section.
Risks of investing6
Introduction
This section 6 describes the following potential key risk factors:
• general risks associated with an investment in the Bonds;
and
• specific risks relating to the Ryman Group’s
creditworthiness.
Key risks outlined in this section are based on an assessment
of the probability of a risk occurring and its potential impact
(individually or in combination with other key risks) at the date
of this PDS.
There is no guarantee or assurance that key risks will
not change, alter in their significance or that other risks
will not emerge.
You should carefully consider these risk factors (together with
the other information in this PDS) before deciding to invest in
the Bonds.
Before making any investment decision it is important that
investors consider the suitability of an investment in the Bonds
in light of their own individual risk profile for investments,
investment objectives and personal circumstances (including
financial and taxation issues). The risks described in this
section do not take account of the personal circumstances,
financial position or investment requirements of any particular
person other than the Ryman Group.
General risks
An investment in the Bonds is subject to the following
general risks.
Credit Risk on Ryman
The risk that Ryman becomes insolvent and is unable to meet
its obligations under the Bonds. If the Security is insufficient to
repay you in these circumstances, you might not recover the
amount of your investment in the Bonds or receive the returns
you expect.
Secondary Market Risk
The risk that, if you wish to sell your Bonds before maturity:
• you may be unable to find a buyer; or
• the price at which you are able to sell them is less than the
amount you paid for the Bonds.
These outcomes may arise because of factors related to
Ryman Group’s creditworthiness, or because of other factors.
These other factors may include the following:
• The fact that a trading market for the Bonds may never
develop, or if it develops is not very liquid. Although
permission is expected to be granted to quote the Bonds on
the NZX Debt Market, this does not guarantee any trading
market in the Bonds.
• The level, direction and volatility of market interest rates.
For example, if market interest rates go up, the market value
of the Bonds would typically be expected to go down and
vice versa.
• The fact that Bondholders seeking to sell relatively small
or relatively large amounts of Bonds may not be able to
do so at prices comparable to those available to other
Bondholders.
Specific risks relating to Ryman’s creditworthiness
Ryman considers that the circumstances which could
significantly affect, either individually or in combination,
the Ryman Group’s future financial position and financial
performance, and therefore significantly increase the risk that
Ryman may default on its obligations under the Bonds are as
set out below. These circumstances, either individually or in
combination, may affect Ryman’s ability to pay interest on, or
repay, the Bonds.
Included in this section are:
• Ryman’s assessment of the nature, likelihood and potential
magnitude of the impact of these circumstances; and
• the strategies that exist, or that have been adopted by
the Ryman Group, to reduce or manage the risk of this
impact arising.
RYMAN HEALTHCARE LIMITED
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CARING FOR OLDER PEOPLE/OPERATIONS
Description
of risk
The Ryman Group provides resthome, hospital and other specialised care to approximately 5,500 older people
in its villages in New Zealand and Victoria. These Residents are a vulnerable group within society, requiring a
high level and quality of care.
Care quality
Across the Ryman Group hospital and dementia care is provided to approximately 1,750 people. This type of
care is more specialised and requires greater skill and attention, reflecting a greater dependency by residents,
which generates increased risk of concerns arising.
Incidents of substandard care of a Resident or improper conduct by a staff member may undermine the
public’s confidence in Ryman’s ability to provide professional, high quality care to Residents. Similarly, this
confidence could be negatively affected if a significant health, safety or wellbeing incident within an operating
village resulted in harm to a Resident or staff member.
Pandemic
In addition, the number of Residents and nature of community living in aged care centres carries a risk that
an outbreak of a pandemic (whether Covid-19 or another virus or disease) may adversely affect Residents in
one or more Ryman care centres. This is particularly acute where older persons are more susceptible to the
relevant virus/disease. A greater level and proportion of care is offered in Ryman villages than by many other
operators, which exposes the Ryman Group to this risk to a greater extent.
Assessment
of nature,
likelihood
and potential
magnitude
of risk
Care quality
In order for the Ryman Group to suffer a material financial impact, the improper care or behaviour would
generally need to be systemic, reflect a pattern or be egregious in nature, rather than isolated in nature.
A significant loss of confidence in Ryman could reduce demand for spaces in care centres in Ryman Group
villages, causing a downturn in occupancy levels and in turn revenue from care fees. This could lead to a
possible breach of Ryman’s bank or Bond covenants.
A particularly serious case of substandard care (or a pattern of substandard care) could result in the relevant
Ryman Group member losing its certification to provide aged care under the Health and Disability Services
(Safety) Act 2001 (or the equivalent Australian legislation) or an adverse finding by another body having
oversight of Ryman’s care practices including the Health and Disability Commissioner or the Office of the
Ombudsman.
Pandemic
A pandemic affecting one or more Ryman care centres could require Ryman to establish alternative facilities to
care for affected Residents and/or result in increased staffing at these facilities, at increased cost to Ryman. It
could also cause a significant decline in new residents at affected care centres, with Ryman’s costs of operating
its care centres not reducing in line with any decline.
Any perception that Ryman is inadequately caring for Residents in a village affected by a pandemic could
undermine confidence in Ryman’s ability to provide care to Residents in the long term. This in turn may cause a
significant reduction in demand to live in Ryman villages.
Government-imposed restrictions on the movement of people or operation of businesses (as seen in New
Zealand and Victoria during 2020) could also delay the ability for prospective residents to visit Ryman villages
(delaying the sale of new occupation rights) and/or new residents to move into Ryman villages.
Mitigation
strategies
Care quality
Ryman has policies and procedures in place to provide care staff with training to deliver a high standard of care to
residents. Ryman’s philosophy of care that it has “got to be good enough for mum or dad” aims to drive continuous
improvement in the education of its care staff. Staff receive an induction and orientation programme on starting
at Ryman. This is followed up with shift shadowing for new staff, and regular updates on clinical knowledge and
skills through frequent education sessions covering a variety of areas relevant to caring for older people. Areas
include resident rights, infection prevention and control, wound management, mental health and wellbeing and
medication management.
Over the last two years, Ryman has been working with specialist input to develop myRyman Life, a new model
of person-centred dementia care. The model is supported by four eLearning modules for all Ryman staff
to complete, in order to understand how to effectively engage with people with dementia. Ryman has also
partnered with Otago Polytechnic to create a Ryman-specific Certificate in Person Centred Dementia care. This
qualification sits on the New Zealand Qualifications Authority framework and has been endorsed by national and
international specialists in dementia. This qualification is completed by all staff working in the dementia care areas
immediately following their orientation period.
RYMAN HEALTHCARE LIMITED
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Mitigation
strategies
(continued)
Ryman also endeavours to attain higher standards within its care centres than is required by law. 81% of
New Zealand villages within the Ryman Group hold four-year certifications for rest home care under the
Health and Disability Services (Safety) Act 2001, which recognise villages that consistently exceed the care
standards required by law. The Ryman Group’s Australian villages all exceed the government care standards
imposed in Victoria.
The Board has a standing Clinical Governance Committee, which includes external experts in the health of older
people, whose role is to support and enhance the quality of the Ryman Group’s clinical performance and care and
service provision.
Ryman has also established a Medications Advisory Committee to better understand the impact of medications
on older people.
Pandemic
Ryman has an infectious diseases protocol, which has evolved over many years and is regularly updated.
The protocol is designed to protect the safety of Ryman Group Residents and staff. It encompasses infection
control and pandemic plans designed to prevent or contain any outbreak of infections in Ryman villages. These
plans are overseen by the Clinical Governance Committee, which has access to external advice from specialists
including geriatricians. These plans allow for a co-ordinated response to any pandemic across all villages in the
Ryman Group.
Ryman’s approach to handling a pandemic also includes ensuring sufficient supplies of personal protective
equipment (PPE) are available to staff, and that staff are appropriately trained in the use of PPE. Ryman has plans
in place to provide additional support and resources to both Residents and staff throughout a pandemic, which
are designed to improve security and wellbeing and bolster Ryman’s reputation for providing care to older people.
If Ryman sales staff cannot meet prospective residents in person due to government-imposed restrictions, they
are able to conduct meetings online and to progress sales of occupation rights remotely.
PROPERTY MARKET
Description
of risk
The value of occupation rights for units in Ryman Group villages is linked to the value of residential properties
in the area in which the relevant village is situated. If a downturn in the property market was to occur in markets
where the Ryman Group operates, or demand reduced relative to supply in that market, this could have a
material adverse effect on the Ryman Group.
A reduction in demand or a downturn may have an impact in two important ways. First, this could result in a
revaluation of the Ryman Group’s property assets which would weaken Ryman’s balance sheet and have the
potential to result in Ryman breaching its bank or Bond covenants.
Secondly, prospective residents may refrain from (or have difficulty) selling their own houses or selling them
at a sufficient price to enable them to acquire occupation rights to a unit at a Ryman Group village. This could
slow the rate of sales of occupation rights to new units and/or resales of occupation rights to existing units, both
of which could adversely impact Ryman’s cash flow and revenue streams.
Assessment
of nature,
likelihood
and potential
magnitude
of risk
The impact of a downturn in the property market will depend on both the extent of the downturn and the
particular markets affected. For example, a downturn in the Auckland or Victoria property markets (where
the Ryman Group has or will have many of its largest and highest-value villages) would be expected to have
a greater impact on Ryman’s cash flows and revenue streams than a downturn in a market where there are a
smaller number of villages.
Ryman’s ability to acquire new sites for villages and develop those villages is also influenced by Ryman’s
endeavours to recycle capital from sales of units in developed villages. A downturn in a property market
affecting Ryman could slow Ryman’s ability to recycle capital, which may impact on the timeframes for the
acquisition and development of sites.
RYMAN HEALTHCARE LIMITED
20
Mitigation
strategies
Ryman’s Occupation Agreements with Residents for independent and serviced units provide for Residents to
pay a deferred management fee of up to 20% of their occupancy advance, payment of which is set off against
the repayment of occupancy advances to Residents. This gives Ryman a resale bank which provides Ryman
with a buffer in the event of a decline in house prices. There is also typically a material margin between the
median house price in an area and the average occupancy advance for an independent or serviced unit at a
Ryman village in that area. This further protects Ryman from a downturn in the property market.
Ryman also has a degree of control over its construction and development timeframes. This enables Ryman to
adjust its development activity according to demand for units in a Ryman village under construction, and in turn
to reduce capital intensity and/or improve overall cash flow. This reduces the potential for Ryman to breach its
bank or Bond covenants.
Ryman’s increasing geographical diversification across multiple regions further helps to reduce the impact of a
downturn in the property market occurring in one region.
CONSTRUCTION
Description
of risk
Ryman primarily managers most of the construction of villages within the Ryman Group itself rather than
through contractors. While an inability to engage some contractors on time and on acceptable terms
could have some impact on Ryman’s development activities, Ryman is less exposed to the risk of engaging
contractors than many of its major New Zealand competitors.
Construction risk affecting the Ryman Group is more likely to occur in other ways, namely:
• a significant one-off event at a site causing a material delay in construction activities on the site (this could
include a health, safety or wellbeing incident or other regulatory breach, or a severe weather event, fire or
similar event); and/or
• consents to develop or complete construction of a new or existing village (including building consents, code
compliance certificates and resource consents) taking longer to obtain than planned, resulting in delays to
the completion of construction.
In addition, a pandemic or other outbreak of a disease (whether Covid-19 or another pandemic/outbreak) may
result in regular or prolonged interruptions to Ryman’s construction programme, which could reduce Ryman’s
build rate. These interruptions could arise from government-imposed restrictions on building and construction
activities during a lockdown aimed at reducing the spread of a virus/disease (as seen in New Zealand and
Victoria during 2020).
Each of these individually or combined could adversely affect cash flows and delay revenues for the Ryman
Group, which in turn could impact on Ryman’s ability to meet its debt repayment obligations or its bank and
Bond covenants.
Assessment
of nature,
likelihood
and potential
magnitude
of risk
It is likely that a health, safety and wellbeing incident or other regulatory issue or delayed consents would need
to be serious in order to cause material delays in construction activities on a site. Ryman has taken a number
of steps to mitigate the risk of this – see below. However, a serious health, safety and wellbeing, regulatory or
consent issue could result in a substantial delay to construction on a site.
A high proportion of Ryman’s construction activities are generally centred in Auckland and Victoria, meaning
interruptions to construction in these regions are likely to have a greater impact on Ryman’s financial
performance than where other regions are impacted by a similar occurrence. This will depend, however, on
where Ryman’s construction sites are located at any relevant time.
Mitigation
strategies
In addition to primarily managing its construction activities, Ryman implements a number of actions to mitigate
the effects of construction-related risks across the Ryman Group.
Ryman has a number of health, safety and wellbeing initiatives in place across the Ryman Group. These
include holding expos for all construction employees, having a campaign aimed at improving health, safety and
wellbeing conversations, and having standing health, safety and wellness and development and construction
board committees. Ryman is also in the process of refining its health, safety and wellbeing system across the
group.
To minimise the risk of a delay in construction caused by a consenting issue, Ryman seeks to engage early
with local communities (including holding community meetings) and relevant local and municipal authorities to
enable potential consenting issues to be addressed by Ryman at an early stage.
The Ryman Group’s distributed geography also means construction activity may be increased in one region to
account for any delay to construction activity in another area due to a pandemic or other outbreak of disease.
In these circumstances a change of construction programme for a village under construction may also be
possible, to enable part of that village to become operational sooner.
RYMAN HEALTHCARE LIMITED
21
Ta x7
If you are tax resident in New Zealand or otherwise receive payments of interest on the Bonds that are subject to the resident
withholding tax rules, resident withholding tax will be deducted from payments of interest to you, unless you notify the Securities
Registrar that you have RWT-exempt status (as defined in the Income Tax Act 2007) and that status remains valid on the record date
for the relevant payment date.
If you are not a tax resident in New Zealand and you receive payments of interest on the Bonds subject to the non-resident
withholding tax rules, you may have non-resident withholding tax deducted from interest that is payable under the Bonds at the
applicable rate.
However, if Ryman is lawfully able to do so, it (or the Securities Registrar on its behalf) will, in lieu of deducting non-resident
withholding tax, pay approved issuer levy (AIL) payable in respect of interest that is payable under your Bonds. You may by
notification to Ryman elect that non-resident withholding tax be deducted from your interest payments instead of applying the
AIL regime.
If the AIL regime applies, Ryman will apply the zero rate of AIL if possible, and otherwise pay AIL at the applicable rate. The amount
of any approved issuer levy paid by Ryman will be deducted from payments to you.
If the AIL regime changes, Ryman reserves the right not to pay AIL. See the Trust Deed for further details.
Indemnity
If, in respect of any of your Bonds, Ryman becomes liable to make any payment of, or on account of, tax payable by you, then
you will be required to indemnify Ryman in respect of such liability. Any amounts paid by Ryman in relation to any such liability
may be recovered from you by withholding the amount from further payments to you in respect of Bonds. See the Trust Deed for
further details.
Generally
There may be other tax consequences from acquiring or disposing of the Bonds. If you have any queries relating to the tax
consequences of the investment, you should obtain professional advice on those consequences.
The above generalised summary is based on the taxation laws in force in New Zealand as at the date of this PDS. Future changes
to these or other laws may affect the tax consequences of an investment in the Bonds.
LABOUR/IMMIGRATION
Description
of risk
As the Ryman Group develops further villages and increases its construction activities, it requires an increasing
number of employees in both its construction division and in the care centres at its villages.
Recruiting the number and quality of employees Ryman needs in these two areas requires constant attention.
An inability to recruit and retain sufficient quality and experienced employees in the Ryman Group’s
construction and care teams could impede the Group’s ability to develop new and existing villages within
Ryman’s intended timeframes or to operate care facilities as the Ryman Group expands.
Assessment
of nature,
likelihood
and potential
magnitude
of risk
A significant proportion of Ryman’s current staff in both construction and care areas come from overseas.
Ryman is susceptible to changes in government immigration policy in both New Zealand and Australia, which
is beyond Ryman’s control. If increased restrictions were imposed on the ability for overseas people to work in
New Zealand or Victoria, this could exacerbate a skills shortage in the construction and/or care areas.
Events that result in border closures or restrictions (including due to a pandemic such as Covid-19) may limit
the number of potential overseas-trained staff available for Ryman to recruit as Ryman requires.
Either situation could have an adverse impact on Ryman’s cashflows and revenues due to slower construction
activity, or an inability to open or operate care centres.
Mitigation
strategies
Ryman regularly assesses its workforce needs so that it can address any shortfalls and aims to pay its
care staff and nurses remuneration within the upper quartile of market pay for these roles. Ryman has also
introduced an additional pay step for nurses to recognise the advanced skills and knowledge of the most
experienced nurses.
These initiatives are designed to make the Ryman Group a more attractive employer and to attract and retain
high quality people to enable the Ryman Group to provide high quality care services. This in turn is intended to
minimise vacancies for roles within the Ryman Group.
RYMAN HEALTHCARE LIMITED
22
Complaints about the Bonds can be directed to:
Ryman Healthcare Limited at
Attn: Company Secretary
Airport Business Park
92d Russley Road
P.O. Box 771
Christchurch 8140
Telephone: 0800 588 222
Email: company.secretary@rymanhealthcare.com
If for any reason Ryman is unable to resolve your complaint,
please contact:
The Bond Supervisor at
Manager Client Services
Corporate Trustee Services
Public Trust
Level 9
34 Shortland Street
Auckland 1010
Telephone: 0800 371 471
Email: cts.enquiry@publictrust.co.nz
The Bond 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 Bond Supervisor has not been able to resolve
your issue, you can refer the matter to FSCL by emailing complaints@fscl.org.nz, or calling FSCL on 0800 347 257,
or by completing the complaints form online at www.fscl.org.nz/complaints/complaint-form, or by 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.
Complaints may also be made to the Financial Markets Authority through their website www.fma.govt.nz
How to complain9
NameRole
IssuerRyman Healthcare LimitedIssuer of the Bonds.
Bond SupervisorPublic TrustHolds certain covenants on trust for the benefit of the Bondholders,
including the right to enforce Ryman’s obligations under the Bonds.
ArrangerANZ Bank New Zealand LimitedProvides advice and assistance to Ryman in arranging the Offer.
Joint Lead
Managers
ANZ Bank New Zealand Limited
Forsyth Barr Limited
Hobson Wealth Partners
Limited
Westpac Banking Corporation
(ABN 33 007 457 141) (acting
through its New Zealand
branch)
Assist with the bookbuild for the Offer, and marketing and distribution of
the Offer.
Except as described above, the Joint Lead Managers are not otherwise
involved in the Offer. None of the Arranger, the Joint Lead Managers
and their respective directors, employees, agents and advisers have
independently verified the content of this PDS.
This PDS does not constitute financial advice from the Arranger, any Joint
Lead Manager or any of their respective directors, officers, employees,
agents or advisers to purchase, any Bonds. You must make your own
independent investigation and assessment of the financial condition and
affairs of Ryman before deciding whether or not to invest in the Bonds.
Securities RegistrarLink Market Services LimitedMaintains the register of Bondholders.
Security TrusteeNew Zealand Permanent
Trustees Limited
Holds the Security for all creditors entitled to its benefit (including the
Bond Supervisor and the Bondholders).
Solicitors to IssuerChapman TrippProvides legal advice to the Ryman Group in respect of the Offer.
Solicitors to Bond
Supervisor
Lane NeaveProvides legal advice to the Bond Supervisor in respect of the Offer.
Who is involved?
8
RYMAN HEALTHCARE LIMITED
23
The Offer will be open to institutional investors and members of the public who are resident in New Zealand.
There is no public pool for the Bonds. All of the Bonds offered under the Offer (including any oversubscriptions) have been reserved
for subscription by clients of the Joint Lead Managers, Primary Market Participants and other approved financial intermediaries
invited to participate in a bookbuild conducted by the Joint Lead Managers.
This means you can only apply for Bonds through a Primary Market Participant or approved financial intermediary who has obtained
an allocation. You can find a Primary Market Participant by visiting www.nzx.com/investing /find-a-participant.
The Primary Market Participant or approved financial intermediary will:
• provide you with a copy of this PDS (if you have not already received a copy);
• explain what you need to do to apply for Bonds; and
• explain what payments need to be made by you and by when.
The Primary Market Participant or approved financial intermediary can also explain what arrangements will need to be put in place
for you to trade the Bonds (including obtaining a common shareholder number (CSN), an authorisation code (FIN) and opening an
account with a Primary Market Participant) as well as the costs and timeframes for putting such arrangements in place.
How to apply11
Contact information12
Issuer
Ryman Healthcare Limited
Attn: Company Secretary
Airport Business Park
92d Russley Road
P.O. Box 771
Christchurch 8140
Telephone: 0800 588 222
Securities Registrar
Link Market Services Limited
Level 11, Deloitte Centre
80 Queen Street
Auckland 1010
P.O. Box 91976, Auckland 1142
Telephone: +64 9 375 5998
Arranger
ANZ Bank New Zealand Limited
Level 10, ANZ Centre
171 Featherston Street
Wellington 6011
Telephone : 0800 269 476
ANZ Bank New Zealand
Limited
Level 10, ANZ Centre
171 Featherston Street
Wellington 6011
Telephone : 0800 269 476
Forsyth Barr Limited
Level 23, Lumley Centre
88 Shortland Street
Auckland 1010
Telephone: 0800 367 227
Hobson Wealth
Partners Limited
Level 4, Australis Nathan
Buildings
37 Galway Street
Britomart
Auckland 1010
Telephone: 0800 742 737
Westpac Banking
Corporation (ABN 33 007
457 141) (acting through its
New Zealand branch)
Westpac on Takutai Square
Level 8, 16 Takutai Square
Auckland 1010
Telephone: 0800 942 822
Joint Lead Managers
Further information relating to Ryman and the Bonds is available on the online offer register maintained by the Companies Office
known as ‘Disclose’. The offer register can be accessed at www.companiesoffice.govt.nz/disclose.
A copy of the information on that register is also available on request to the Registrar of Financial Service Providers at
registrar@fspr.govt.nz. The information contained on that register includes a copy of the Trust Deed (including the Supplemental
Deed) and a copy of the Security Trust Deed.
Ryman is subject to a disclosure obligation in relation to its shares that requires it to notify certain material information
to the NZX for the purpose of that information being made available to participants in the market. Ryman’s page on the
NZX website, which includes information made available under the disclosure obligations referred to above, can be found at
www.nzx.com/instruments/RYM.
Where you can
find more information
10
RYMAN HEALTHCARE LIMITED
24
Glossary
$New Zealand dollars.
Accommodation BondsAccommodation bonds held by the Ryman Group in connection with any aged care facility regulated by
the Aged Care Act 1997 (Cth).
AgentANZ Bank New Zealand Limited or any replacement agent appointed under the Bank Facility Agreement.
Adjusted EBITThe relevant part of the Group’s aggregate net operating profit before tax for a period:
• plus Interest Expense for that period less capitalised interest for that period;
• excluding all unrealised portions of fair value movement (to the extent included in the above) in the
relevant part of the Group’s real property which is held for investment or future development; and
• minus the non-cash element of deferred management fees.
Approved Lender FacilityThe meaning given to that term in the Security Trust Deed.
ArrangerANZ Bank New Zealand Limited.
Australian GuarantorAny Australian Subsidiary that has granted a Guarantee.
Australian Resident LoanAny incoming contribution and/or loan provided to the Guaranteeing Group by a Resident of an
Australian Village.
Australian RV ActThe Retirement Villages Act 1986 (Vic).
Australian SubsidiaryAny Subsidiary of Ryman incorporated in Australia.
Australian Village CompanyAny Subsidiary which operates and/or owns, and has received from a Resident an Australian Resident
Loan (or part thereof) in consideration of the right to become a Resident in, a Village in Australia. The
Australian Village Companies as at the date of this PDS are set out in Part B of Schedule 1.
Bank Facility AgreementThe syndicated facility agreement dated 13 October 2008 (as amended and restated from time to
time) between (among others) Ryman and Ryman Healthcare (Australia) Pty Limited as borrowers, the
Guarantors as obligors, and the Agent.
BeneficiariesThe creditors of Ryman that are defined as beneficiaries for the purposes of the Security Trust Deed
and therefore share the Security with Bondholders on a pro-rata basis, and Beneficiary means any one
of them.
Bond SupervisorPublic Trust or such other supervisor as may hold office as supervisor under the Trust Deed from time
to time.
BondholderA person whose name is entered in the Register as a holder of a Bond.
BondsThe bonds constituted and issued pursuant to the Trust Deed and Supplemental Deed and offered
pursuant to this PDS.
Business DayA day (other than a Saturday or Sunday) on which registered banks are generally open for business in
Auckland, Christchurch and Wellington, except that in the context of the Listing Rules it means a day on
which the NZX Debt Market is open for trading.
Care SuiteA unit in a care centre operated by a NZ Village Company which has been designated as a care suite.
Closing DateThursday, 10 December 2020 at 1pm.
Community FacilitiesThe community facilities at a Village such as a dining room, club lounge, hair salon, swimming pool, gym,
bowling green and other recreational facilities.
Debt to Equity CovenantThe ratio of Total Liabilities of the Ryman Group (after deducting the total value of Resident Occupancy
Advances, Australian Resident Loans and Accommodation Bonds owing or held by the Group) to Net
Tangible Assets of the Ryman Group, which under the Trust Deed must not be greater than 1.0:1.0.
Deed of SupervisionA deed of supervision between each NZ Village Company and the Statutory Supervisor entered into
pursuant to the NZ RV Act.
DevelopmentThe development of any land (including the construction of a retirement village or other aged care facility)
by a member of the Ryman Group.
Disclose RegisterThe online offer register maintained by the Companies Office known as ‘Disclose’.
Event of DefaultEach event set out in condition 18.1 of Schedule 1 to the Trust Deed, some of which are summarised in
section 5 (Key features of the Bonds).
RYMAN HEALTHCARE LIMITED
25
Extraordinary ResolutionA resolution passed at a meeting of Bondholders by Bondholders holding not less than 75% of the
aggregate Principal Amount of Bonds held by those persons entitled to vote and voting.
Financial IndebtednessAny indebtedness, present or future or actual or contingent in respect of moneys borrowed or raised or
any financial accommodation, of whatever nature, including indebtedness under or in respect of:
(a) a negotiable or other financial instrument, guarantee, interest or currency swap or hedge
agreement, financial option, futures contract or analogous transaction;
(b) a hire purchase or deferred payment obligation (other than a deferred payment obligation which
represents the purchase price of assets or services obtained on normal commercial terms in the
ordinary course of trading);
(c) a lease, licence or other arrangement in respect of any property (real or personal, tangible or
intangible) entered into primarily for the purpose of raising finance or for the purpose of financing
the acquisition of the property leased, licenced or subject to the relevant arrangement (other
than a lease, licence or arrangement which may be accounted for as an operating lease under
NZ GAAP).
First Interest Payment Date18 March 2021.
FMCAFinancial Markets Conduct Act 2013.
General Security
Agreements
The general security agreements and other security agreements granted by the Guaranteeing Group in
favour of the Security Trustee, being those defined in the definition of “General Security Agreements” in
the Security Trust Deed.
GuaranteeThe cross guarantee contained in the Security Trust Deed granted in favour of the Security Trustee.
Guaranteeing GroupRyman and the other Guarantors.
Guaranteeing Group
Coverage Covenant
The ratio of Total Tangible Assets and Adjusted EBIT of the Guaranteeing Group to Total Tangible Assets
and Adjusted EBIT of the Ryman Group taken as a whole, which under the Trust Deed must not be less
than 90%.
GuarantorRyman and each person who provides the Guarantee under the Security Trust Deed and is a party to the
Security, being, at the date of this PDS, Ryman and each company set out in Schedule 1.
Inland RevenueThe New Zealand Inland Revenue Department.
Interest Expense
In respect of the relevant part of the Group for any period, the amount, calculated on a consolidated
basis of all interest and financial costs, any amounts in the nature of interest, or having a similar
purpose or effect to interest, included in its most recent consolidated profit and loss statement
prepared at that time for the period as having been paid or incurred by the relevant part of the Group
for the period and includes:
(a) any dividend payable on any share or stock the obligations in respect of which constitute
Financial Indebtedness;
(b) any discount on any bills or bonds, notes or other instruments drawn, accepted or endorsed;
(c) any line, facility, acceptance, discount, guarantee or other fees and amounts incurred on a
regular basis payable in relation to Financial Indebtedness;
(d) finance lease charges comprising that portion of hire and rental payments under any
finance lease entered into; and
(e) any capitalised interest,
and, for the avoidance of doubt, for the purpose of this definition, Interest Expense shall be
calculated on a net basis after deducting any interest income and shall be determined in accordance
with NZ GAAP.
Interest Payment Dates18 March, 18 June, 18 September and 18 December in each year (or if that day is not a Business Day, the
next Business Day) until and including the Maturity Date.
Interest PeriodEach period beginning on, and including, an Interest Payment Date (or the Issue Date) and ending on,
but excluding, the next Interest Payment Date (or the Maturity Date).
Interest RateThe interest rate for the Bonds, as announced by Ryman via NZX on or about the Interest Rate Set Date.
Interest Rate Set DateThursday, 10 December 2020.
Issue DateFriday, 18 December 2020.
Issue MarginThe issue margin determined by Ryman in conjunction with the Joint Lead Managers as announced by
Ryman via NZX on or about the Interest Rate Set Date.
RYMAN HEALTHCARE LIMITED
26
Indicative MarginThe indicative Issue Margin determined by Ryman in conjunction with the Joint Lead Managers as
announced by Ryman via NZX on or about 7 December 2020.
Joint Lead ManagersANZ Bank New Zealand Limited, Forsyth Barr Limited, Hobson Wealth Partners Limited and
Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch).
Life TitleA certificate of title issued to a Resident pursuant to that Resident’s Occupation Agreement entered into
before 1 September 2014 providing that Resident with a life estate in the Unit occupied by that Resident.
Listing RulesThe listing rules applying to the NZX Debt Market.
Major DefaultHas the meaning given to that term in the Security Trust Deed.
Majority BeneficiariesA Beneficiary or group of Beneficiaries whose outstanding principal amounts to more than 66.66% of the
total outstanding principal amount of all Beneficiaries.
Maturity DateFriday, 18 December 2026.
Net Tangible AssetsThe amount by which Total Tangible Assets exceeds Total Liabilities.
NZ GuarantorRyman and any New Zealand Subsidiary that has granted a Guarantee.
NZ Village CompanyRyman and any Subsidiary which owns and operates a Village in New Zealand. The NZ Village Companies
as at the date of this PDS are Ryman and those companies set out in Part A of Schedule 1.
NZ GAAPGenerally accepted accounting practice in New Zealand as defined in section 8 of the Financial Reporting
Act 2013.
NZ GSAThe General Security Agreement (Composite) dated 10 September 2002 (as amended and restated from
time to time) that is provided by New Zealand incorporated Guarantors in favour of the Security Trustee.
NZXNZX Limited.
NZX Debt MarketThe debt security market operated by NZX.
NZX Main BoardThe main registered market for trading equity securities operated by NZX.
NZ RV ActRetirement Villages Act 2003.
Occupancy AdvanceThe loan payable by a Resident to the relevant Village Company under an Occupation Agreement, in
exchange for the right to occupy a Unit or Care Suite (as applicable) for life.
Occupation AgreementAn occupation right agreement within the meaning of the NZ RV Act (for Villages in New Zealand) or a
residence contract within the meaning of the Australian RV Act (for Villages in Australia).
OfferThe offer of Bonds made by Ryman under this PDS.
Opening DateMonday, 7 December 2020.
PDSThis product disclosure statement for the Offer dated 26 November 2020.
Primary Market ParticipantHas the meaning given to that term in the NZX Participant Rules as amended from time to time.
Principal Amount$1.00 per Bond.
RegisterThe register in respect of the Bonds maintained by the Securities Registrar.
ResidentA person who is a resident of a Village Company pursuant to an Occupation Agreement with that
Village Company.
Resident MortgageA mortgage granted by a NZ Village Company to a Resident pursuant to an Occupation Agreement
entered into between that NZ Village Company and the Resident before 1 September 2014 over the
NZ Village Company’s reversionary interest in the land on which the relevant Unit is situated to secure the
NZ Village Company’s obligations to the Resident under the Resident’s Occupation Agreement.
Resident Occupancy
Advance
The aggregate amount of all moneys payable by the Ryman Group to a Resident on the termination of that
Resident’s Occupation Agreement in relation to that Resident’s Unit or Care Suite pursuant to the NZ RV Act.
RymanRyman Healthcare Limited.
Ryman GroupRyman and the Subsidiaries.
Securities RegistrarLink Market Services Limited.
SecurityThe Security Trustee Mortgages and the General Security Agreements.
Security Sharing DeedEach deed between a NZ Village Company, the Security Trustee and the Statutory Supervisor, which
sets out how the proceeds of the security held by the Statutory Supervisor and the Security Trustee are
to be applied.
RYMAN HEALTHCARE LIMITED
27
Security Trust DeedThe security trust deed dated 13 October 2008 between (among others) Ryman, the Guarantors and the
Security Trustee (as amended from time to time).
Security TrusteeNew Zealand Permanent Trustees Limited or such other security trustee as may hold office as security
trustee under the Security Trust Deed from time to time.
Security Trustee MortgagesTogether:
(a) first ranking registered mortgages over:
(i) all land and buildings owned by NZ Guarantors that are not NZ Village Companies. This
includes bare land and land that is under development and not yet used for operational
retirement villages; and
(ii) any land and buildings, owned by NZ Guarantors that are NZ Village Companies which are
on separate legal titles to any land allocated for Units. This generally includes care centres
(but only if that care centre does not contain any Care Suites), hospital facilities and
Community Facilities; and
(b) the Security Trustee’s Care Centre Land Mortgage.
Security Trustee’s Care
Centre Land Mortgage
A second ranking registered mortgage over the care centre of any NZ Village Company, but only if that
care centre includes any Care Suites.
Statutory ChargeThe statutory charge created under the Australian RV Act in favour of Residents of Australian
Village Companies.
Statutory SupervisorAnchorage Trustee Services Limited or such other statutory supervisor as may be appointed from time to
time as statutory supervisor in respect of a Village pursuant to the NZ RV Act.
Statutory Supervisor’s
Mortgage
A first ranking mortgage over:
(a) all land and buildings owned by a NZ Village Company containing Units (other than Units against
which a Resident Mortgage has been registered); and
(b) the land and buildings on which a care centre of any NZ Village Company is located where the
care centre includes Care Suites,
which secures the relevant NZ Village Company’s obligations to Residents under Occupation Agreements
and to the Statutory Supervisor under a Deed of Supervision.
SubsidiaryA subsidiary of Ryman within the meaning of section 5 of the Companies Act 1993.
Supplemental DeedThe supplemental trust deed dated 24 November 2020 between Ryman and the Bond Supervisor
constituting and setting out the terms and conditions of the Bonds (as amended or supplemented from
time to time).
Swap RateThe mid-market swap rate for an interest rate swap from the Issue Date to the Maturity Date, as calculated
by Ryman in conjunction with the Arranger with reference to Bloomberg page “ICNZ4” (or any successor
page) on the Interest Rate Set Date and expressed on a quarterly basis (rounded to two decimal places, if
necessary, with 0.005 being rounded up).
Total LiabilitiesThe aggregate amount of liabilities of the Ryman Group set out in their most recent consolidated
financial statements.
Total Tangible AssetsThe aggregate value of all tangible assets of the Ryman Group or the Guarantors (as applicable) set out in
their most recent consolidated financial statements less values allocated to goodwill, patents, trademarks,
design rights, future tax benefits, underwriting and formation expenses, unreleased hedging gains and
other items NZ GAAP recognises as intangible assets.
Trust DeedThe Master Trust Deed dated 24 November 2020 between Ryman and the Bond Supervisor pursuant
to which certain bonds may be issued (as amended or supplemented from time to time), and where the
context requires includes the Supplemental Deed.
UnitAny independent unit or serviced unit at a Village.
USPPAny private placement of debt securities by any Ryman Group member to investors in the United States
of America.
VillageAny retirement village owned by a Group Member that:
• in New Zealand is registered as a retirement village under the NZ RV Act; and
• in Australia is registered as a retirement village under the Australian RV Act.
Village CompanyA NZ Village Company or an Australian Village Company.
RYMAN HEALTHCARE LIMITED
28
Schedule 1: Subsidiaries
Part A – New Zealand Subsidiaries
Company Name
Incorporation
Number
NZ Guarantor
NZ Village
Company
1Anthony Wilding Retirement Village Limited647299
2Bert Sutcliffe Retirement Village Limited3395514
3Bob Owens Retirement Village Limited2191462
4Bob Scott Retirement Village Limited3395374
5Bruce McLaren Retirement Village Limited3015802
6Cafe Ryman Russley Road Limited7706386
7Charles Fleming Retirement Village Limited3038810
8Charles Upham Retirement Village Limited4033498
9Diana Isaac Retirement Village Limited2191463
10Edmund Hillary Retirement Village Limited511226
11Ernest Rutherford Retirement Village Limited1751468
12Essie Summers Retirement Village Limited235276
13Evelyn Page Retirement Village Limited1780664
14Frances Hodgkins Retirement Village Limited603950
15Grace Joel Retirement Village Limited1000225
16Healthcare Shelf Company No. 22 Limited4584919
17Healthcare Shelf Company No. 23 Limited4584830
18Healthcare Shelf Company No. 28 Limited4943639
19Healthcare Shelf Company No. 30 Limited5885427
20Healthcare Shelf Company No. 33 Limited6696613
21Healthcare Shelf Company No. 34 Limited6735513
22Healthcare Shelf Company No. 35 Limited6735518
23Healthcare Shelf Company No. 36 Limited6735594
24Healthcare Shelf Company No. 37 Limited6735526
25Healthcare Shelf Company No. 38 Limited7706296
26Healthcare Shelf Company No. 39 Limited7706416
27Healthcare Shelf Company No. 40 Limited7706437
28Healthcare Shelf Company No. 41 Limited7706382
29Hilda Ross Retirement Village Limited1000226
30Hobsonville Retirement Village Limited4943559
31James Wattie Retirement Village Limited5882314
32Jane Mander Retirement Village Limited1941838
33Jane Winstone Retirement Village Limited649184
34Jean Sandel Retirement Village Limited1080309
35Julia Wallace Retirement Village Limited646399
36Kiri Te Kanawa Retirement Village Limited2151757
37Linda Jones Retirement Village Limited4943439
38Logan Campbell Retirement Village Limited3297889
39Malvina Major Retirement Village Limited647381
40Margaret Stoddart Retirement Village Limited552897
41Miriam Corban Retirement Village Limited4943599
42Murray Halberg Retirement Village Limited4584640
43Ngaio Marsh Retirement Village Limited647380
44Park Terrace No. 2 Limited6735275
45Possum Bourne Retirement Village Limited4033279
RYMAN HEALTHCARE LIMITED
29
Company Name
Incorporation
Number
NZ Guarantor
NZ Village
Company
46Riccarton Park Retirement Village Limited5885409
47Rita Angus Retirement Village Limited1000229
48Ravenstonedale Developments Limited4595879
49Rowena Jackson Retirement Village Limited647382
50Ryman Napier Limited1000227
51Shona McFarlane Retirement Village Limited955855
52William Sanders Retirement Village Limited4584832
53Yvette Williams Retirement Village Limited1582772
Company Name
Australian
Guarantor
Australian
Village
Company
1Ryman Construction Pty Ltd ACN 639 119 681
2John Flynn Retirement Village Pty Ltd (formerly known as Ryman Healthcare (Australia) No.3 Pty
Ltd) ACN 606 236 275 in its personal capacity and as trustee of the John Flynn Retirement Village
Land Trust (formerly known as the Ryman Healthcare (Australia) No.3 Trust)
3Nellie Melba Retirement Village Pty Ltd (formerly known as Ryman Healthcare (Australia) No. 2 Pty
Ltd) ACN 169 513 508 in its personal capacity and as trustee of the Nellie Melba Retirement Village
Land Trust (formerly known as the Ryman Healthcare (Australia) No. 2 Trust)
4Ryman Aged Care (Australia) Pty Ltd ACN 152 245 988
5Ryman Healthcare (Australia) Pty Ltd ACN 142 241 110
6Ryman Healthcare (Australia) No.4 Pty Ltd ACN 606 236 284 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.4 Trust
7Ryman Healthcare (Australia) No.5 Pty Ltd ACN 606 236 293 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.5 Trust
8Ryman Healthcare (Australia) No.6 Pty Ltd ACN 614 242 661 in its personal capacity and as trustee
of the Ryman Healthcare (Australia) No.6 Trust
9Ryman Healthcare (Australia) No.7 Pty Ltd ACN 614 242 714 in its personal capacity and as trustee
of the Ryman Healthcare (Australia) No.7 Trust
10Ryman Healthcare (Australia) No.8 Pty Ltd ACN 614 242 867 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.8 Trust
11Ryman Healthcare (Australia) No.9 Pty Ltd ACN 614 242 956 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.9 Trust
12Ryman Healthcare (Australia) No.10 Pty Ltd ACN 614 243 024 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.10 Trust
13Ryman Healthcare (Australia) No.11 Pty Ltd ACN 626 241 754 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.11 Trust
14Ryman Healthcare (Australia) No.12 Pty Ltd ACN 626 241 772 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.12 Trust
15Ryman Healthcare (Australia) No.13 Pty Ltd ACN 626 241 790 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.13 Trust
16Ryman Healthcare (Australia) No.14 Pty Ltd ACN 626 241 816 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.14 Trust
17Ryman Healthcare (Australia) No.15 Pty Ltd ACN 626 241 898 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.15 Trust
18Ryman Healthcare (Australia) No.16 Pty Ltd ACN 626 241 932 in its personal capacity and as
trustee of the Ryman Healthcare (Australia) No.16 Trust
19Weary Dunlop Retirement Village Pty Ltd (formerly known as Wheelers Hill Properties Pty Ltd)
ACN 153 937 163 in its personal capacity and as trustee of the Weary Dunlop Retirement Village
Land Trust (formerly known as the Wheelers Hill Properties Unit Trust)
Part B – Australian Subsidiaries
---
RYMAN HEALTHCARE LIMITED | INDICATIVE TERMS SHEET
Ryman Healthcare Limited
INDICATIVE TERMS SHEET FOR AN ISSUE OF UP TO $100,000,000
FIXED RATE BONDS (PLUS UP TO $50,000,000 OF OVERSUBSCRIPTIONS)
DUE 18 DECEMBER 2026
DATED 26 NOVEMBER 2020
JOINT LEAD MANAGERS
RYMAN HEALTHCARE LIMITED | INDICATIVE TERMS SHEET
1
IssuerRyman Healthcare Limited (“Ryman”)
InstrumentFixed rate, secured, unsubordinated bonds (“Bonds”)
StatusThe Bonds will be issued under the Master Trust Deed dated 24 November 2020. Principal and interest amounts
in respect of the Bonds will be direct, secured, unsubordinated obligations of Ryman and rank pari passu with all
other unsubordinated obligations of Ryman, except indebtedness preferred by law.
GuarantorsConsistent with the Guarantors for Ryman’s bank facilities.
PurposeThe purpose of the offer is to provide diversity of funding sources and tenor, and the proceeds of the offer will be
used to repay a portion of Ryman’s existing bank debt. This will provide Ryman with additional headroom under
Ryman’s Bank Facility Agreement which it can drawdown as required.
SecurityThe Bondholders will share the benefit of the same security package as Ryman’s banks and any other debt
funding providers who become Beneficiaries under the Security Trust Deed on a pro rata basis. This security is
held by the Security Trustee.
The Security held by the Security Trustee is:
1. first ranking registered mortgages over:
(a) all land and buildings owned by NZ Guarantors that are not NZ Village Companies. This includes bare
land and land that is under development and not yet used for operational retirement villages;
(b) any land and buildings owned by NZ Guarantors that are NZ Village Companies which are on separate
legal titles to any land allocated for Units. This generally includes hospital facilities, Community
Facilities and care centres (but only if that care centre does not contain any Care Suites);
2. second ranking registered mortgages over the care centre of any NZ Village Company but only if that care
centre includes any Care Suites; and
3. general security over all the assets of Ryman and each Guarantor under the General Security Agreements.
Separately, each NZ Village Company provides first ranking mortgages to the Statutory Supervisor over all land
and buildings owned by that NZ Village Company containing Units and the land on which a care centre of any NZ
Village Company is located where the care centre includes Care Suites.
All proceeds of enforcement received under the Security Trustee’s NZ GSA and/or the Security Trustees
Mortgages and the Statutory Supervisor’s Mortgage are applied in accordance with each Security Sharing Deed.
The Security Trust Deed also contains rules regarding the distribution of proceeds received by the Security
Trustee on enforcement of the Security (these are subject to the security arrangements in the Security Sharing
Deed).
Under each Security Sharing Deed the Statutory Supervisor is entitled to the proceeds of enforcement in priority
to the Security Trustee to the extent that the proceeds relate to a Unit, the land on which the Unit is located
and/or land on which a care centre is located (but only where that care centre includes any Care Suites). The
remaining proceeds of enforcement will be shared between the Beneficiaries (including the Bondholders) on a
pro rata basis.
Also, each Resident of an Australian Village Company has the benefit of a statutory charge over the land of the
relevant Australian Village Company to secure that company’s obligation to repay the Australian Resident Loan
paid by a Resident. This charge ranks ahead of the security interest held by the Security Trustee over the assets
of the Australian Village Company.
No registered mortgages are held in respect of any Australian Guarantor. But the Security Trustee has an
unregistered security interest in each Australian Guarantor’s land holdings under the general security (which will
rank behind the statutory charge).
To further diversify sources and tenor of debt funding, Ryman is investigating a number of additional debt funding
options, including an issue of USPP notes and other arrangements with institutional lenders. These transactions
may be completed relatively soon after the date of this terms sheet. It is expected that the providers of such debt
funding will be Beneficiaries entitled to the benefit of the Security under the Security Trust Deed (and will rank
equally for repayment with the Bonds).
Refer to the PDS for more detail on Security.
The product disclosure statement for the Bonds (“PDS”), which contains full details of the offer, is available at
www.rymanhealthcare.co.nz/investors/bonds or can be obtained from the Joint Lead Managers or your usual financial advisor.
Investors must obtain a copy of the PDS before they apply for Bonds.
RYMAN HEALTHCARE LIMITED | INDICATIVE TERMS SHEET
2
Financial
Covenants
Ryman must ensure at all times that:
• Debt to Equity Covenant – the ratio of Total Liabilities of the Ryman Group (after deducting the aggregate
value of all Resident Occupancy Advances, Australian Resident Loans and Accommodation Bonds owing
or held by the Ryman Group) to Net Tangible Assets of the Ryman Group is no greater than 1.0:1.0; and
• Guaranteeing Group Coverage Covenant – the Total Tangible Assets and Adjusted EBIT of the
Guaranteeing Group must represent not less than 90% of the Total Tangible Assets and Adjusted EBIT of
the Ryman Group taken as a whole.
Under the Trust Deed these financial covenants are subject to change but only where the equivalent covenant
in the Bank Facility Agreement is changed and Ryman has certified to the Supervisor that the change is more
favourable to the Bondholders (if it applied to the Bondholders) than the relevant financial covenant.
If there is a breach of the Debt to Equity Covenant, Ryman must, within 6 months of the date of a 6 monthly
compliance report being delivered specifying that breach (or the date on which it should have been delivered,
if earlier) remedy the breach or (if not remedied within 6 months) give notice to the Bond Supervisor within 20
Business Days after such date of its plan to remedy the breach. If the breach is not remedied within 6 months of
the date of that notice (or the date on which it should have been delivered, if earlier) an Event of Default will occur.
Therefore a continued breach of the Debt to Equity Covenant will be an Event of Default approximately 13
months after that breach is disclosed to the Bond Supervisor in the 6 monthly compliance report.
A breach of the Guaranteeing Group Coverage Covenant is an Event of Default if: (1) it is not remedied within
30 days after Ryman or a Ryman Group member becoming aware of the breach; and (2) the default is, or is likely
to be (in the reasonable opinion of the Bond Supervisor) materially prejudicial to Bondholders.
Distribution stopper
While the Bond Supervisor does not have the benefit of a distribution stopper in respect of a breach of the Debt
to Equity Covenant unless that breach becomes an Event of Default (as described above), under the Bank
Facility Agreement, Ryman is not permitted to make a distribution if the ratio equivalent to the Debt to Equity
Covenant in that agreement is breached (unless the lenders under the Bank Facility Agreement waive their
rights).
Refer to the PDS and Master Trust Deed for more detail on covenants that will apply to the Bonds.
Credit RatingsThe Bonds will not be rated.
Issue AmountUp to $100,000,000 with the ability to accept oversubscriptions of up to an additional $50,000,000 at Ryman’s
sole discretion.
No Public PoolAll Bonds, including oversubscriptions, will be reserved for subscription by clients of the Joint Lead Managers,
Primary Market Participants and other persons invited to participate in the bookbuild.
Interest RateTo be determined by Ryman in conjunction with the Arranger following the bookbuild, and be announced by
Ryman via NZX on or about the Interest Rate Set Date.
The Interest Rate will be equal to the sum of the Swap Rate and the Issue Margin but in any case will be no less
than the minimum Interest Rate announced through the NZX on or about 7 December 2020.
Issue MarginThe Issue Margin will be determined by Ryman in conjunction with the Joint Lead Managers following a bookbuild
on the Interest Rate Set Date.
Ryman expects to announce an Indicative Margin through NZX on or about 7 December 2020.
Swap RateThe mid-market swap rate for an interest rate swap of a term matching the period from the Issue Date to the
Maturity Date, as calculated by Ryman in conjunction with the Arranger, according to market convention, with
reference to Bloomberg page ‘ICNZ4’ (or any successor page) on the Interest Rate Set Date and expressed on a
quarterly basis (rounded to 2 decimal places, if necessary, with 0.005 being rounded up).
Interest
Payments
and Interest
Payment
Dates
Interest will be paid quarterly in arrear in equal amounts on 18 March, 18 June, 18 September and 18 December
(or if that day is not a Business Day, the next Business Day) of each year up to and including the Maturity Date.
The first Interest Payment Date will be 18 March 2021.
Record Date10 days before the due date for a payment or, if that day is not a Business Day, the immediately preceding
Business Day.
ISINNZRYMD0010L2
RYMAN HEALTHCARE LIMITED | INDICATIVE TERMS SHEET
3
Listing Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market and all
requirements of NZX relating thereto that can be complied with on or before the distribution of this Terms Sheet
have been duly complied with. However, the Bonds have not yet been approved for trading and NZX accepts
no responsibility for any statement in this Terms Sheet. NZX is a licensed market operator, and the NZX Debt
Market is a licensed market under the Financial Markets Conduct Act 2013.
NZX Ticker code RYM010 has been reserved for the Bonds.
DenominationsMinimum denomination of $5,000 with multiples of $1,000 thereafter
ArrangerANZ Bank New Zealand Limited (“ANZ”)
Joint Lead
Managers
ANZ, Forsyth Barr Limited, Hobson Wealth Partners Limited and Westpac Banking Corporation
(ABN 33 007 457 141) (acting through its New Zealand branch)
Bond
Supervisor
Public Trust
Security
Trustee
New Zealand Permanent Trustees Limited
Registry &
Paying Agent
Link Market Services Limited
Statutory
Supervisor
Anchorage Trustee Services Limited
Early
Redemption
Neither Bondholders nor Ryman are able to redeem the Bonds before the Maturity Date. However, Ryman
may be required to repay the Bonds early if there is an Event of Default (as described in the PDS and the
Master Trust Deed).
Brokerage0.50% brokerage plus 0.50% on firm allocations paid by Ryman
Governing
Law
New Zealand
Selling
Restrictions
Ryman does not intend that the Bonds be offered for sale, and no action has been taken or will be taken to permit
a public offering of Bonds, in any jurisdiction other than New Zealand. You may only offer for sale or sell any Bonds
in conformity with all applicable laws and regulations in any jurisdiction in which it is offered, sold or delivered.
This Terms Sheet may not be published, delivered or distributed in or from any country other than New Zealand.
By subscribing for or otherwise acquiring any Bonds, you agree to indemnify Ryman, the Bond Supervisor, the
Arranger and the Joint Lead Managers and their respective directors, officers, employees and agents in respect
of any loss, cost, liability or damages suffered as a result of an investor breaching these selling restrictions.
PDS LodgementThursday, 26 November 2020
Opening DateMonday, 7 December 2020
Closing Date1pm, Thursday, 10 December 2020
Interest Rate Set DateThursday, 10 December 2020
Issue DateFriday, 18 December 2020
Expected QuotationMonday, 21 December 2020
Maturity DateFriday, 18 December 2026
The dates set out in this Terms Sheet are indicative only and subject to change. Ryman may vary the timetable in its absolute discretion
and without notice. Any such changes will not affect the validity of any applications received. Ryman reserves the right to cancel the
Bond offer, in which case all application monies received will be refunded (without interest) as soon as practicable.
Capitalised terms used but not defined in this Terms Sheet have the meanings given to them in the PDS.
Important Dates
---
11
Retail Bond Presentation | 26 November 2020
Ryman Healthcare Limited
2
This presentation has been prepared by Ryman Healthcare Limited (Ryman) in relation to the offer of
bonds described in this presentation (Bonds). The offer of the Bonds is made in the product disclosure
statement dated 26 November 2020 (PDS), which has been lodged in accordance with the Financial
Markets Conduct Act 2013 (FMCA). The PDS is available through www.companies.govt.nz/disclose or by
contacting ANZ, Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand
branch), Hobson Wealth Partners Limited, and Forsyth Barr Limited as Joint Lead Managers or any other
Primary Market Participant, and must be given to investors before they decide to acquire any Bonds. No
applications will be accepted or money received unless the applicant has been given the PDS.
Capitalised terms used but not defined in this presentation have the meanings given to them in the PDS.
The information in this presentation is of a general nature and does not constitute financial product advice,
investment advice or any recommendation by Ryman, the Bond Supervisor, the Arranger, the Joint Lead
Managers, or any of their respective directors, officers, employees, affiliates, agents or advisers to subscribe
for, or purchase, any of the Bonds.
Nothing in this presentation constitutes legal, financial, tax or other advice.
The information in this presentation does not take into account the particular investment objectives,
financial situation, taxation position or needs of any person. You should make your own assessment of an
investment in the Bonds based on the PDS and should not rely on this presentation. In all cases, you should
conduct your own research on Ryman and analysis of the Offer, the financial condition, assets and
liabilities, financial position and performance, profits and losses, prospects and business affairs of Ryman,
and the contents of this presentation.
This presentation contains certain forward-looking statements regarding Ryman. All of these forward-
looking statements are based on estimates, projections and assumptions made by Ryman about
circumstances and events that have not yet occurred. Although Ryman believes these estimates,
projections and assumptions to be reasonable, they are inherently uncertain. Therefore, reliance should not
be placed upon these estimates or forward-looking statements and they should not be regarded as a
representation or warranty by Ryman, its directors or any other person that those forward-looking
statements will be achieved or that the assumptions underlying the forwarding-looking statements will in
fact be correct. It is likely that actual results will vary from those contemplated by these forward-looking
statements and such variations may be material.
Disclaimer
Please read carefully before the rest of the presentation
Some of the financial information contained in this presentation has not been prepared in accordance with
generally accepted accounting principles (i.e. it is non-GAAP financial information). This includes, in
particular, Ryman’s ‘underlying profit’. Underlying profit is an industry wide measure which Ryman has
used for many years as a means of showing its profit absent any unrealised valuation movements. Ryman
has historically used underlying profit as the basis for determining dividend payments to shareholders.
Ryman shows its underlying profit together with its reported profit based on NZ IFRS (a GAAP measure).
The offer of Bonds is being made only in New Zealand. The distribution of this presentation, and the offer
or sale of the Bonds, may be restricted by law in certain jurisdictions. Persons who receive this presentation
outside New Zealand must inform themselves about and observe all such restrictions. Nothing in this
presentation is to be construed as authorising its distribution, or the offer or sale of the Bonds, in any
jurisdiction other than New Zealand and Ryman accepts no liability in that regard. The Bonds may not be
offered or sold directly or indirectly, and neither this presentation nor any other offering material may be
distributed or published, in any jurisdiction other than New Zealand where action is required for that
purpose.
Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market and all the
requirements of NZX relating thereto that can be complied with on or before the date of this presentation
have been duly complied with. However, NZX accepts no responsibility for any statement in this document.
NZX is a licensed market operator, and the NZX Debt Market is a licensed market under the FMCA.
None of the Arranger, Joint Lead Managers, the Bond Supervisor nor any of their respective directors,
officers, employees, affiliates or agents: (a) accept any responsibility or liability from any loss arising from
this presentation or its contents or otherwise arising in conjunction with the offer of the Bonds; (b)
authorised or caused the issue of, or made any statement in, any part of this presentation; and (c) makes
any representation, recommendation or warranty, express or implied regarding the origin, validity,
accuracy, adequacy, reasonableness or completeness of, or any errors or omissions in, any information,
statement or opinion contained in this presentation and accept no liability (except to the extent such
liability is found by a court to arise under the FMCA or cannot be disclaimed as a matter of law.
33
To d a y ’s
speakers
Gordon MacLeod,ChiefExecutive
Gordon joined Ryman in 2007. He had previously been a corporate finance
partner with PwC and finance director of a London listed hi-tech engineering
company. Gordon has a Bachelor of Commerce degree and he is a Fellow of
Chartered Accountants Australia and New Zealand.
His association with Ryman dates back to 1994 when his Nana moved into
Margaret Stoddart Retirement Village in Christchurch.
David Bennett, Chief Financial Officer
Dave joined Ryman in 2013 and was promoted to Chief Financial Officer in
2017. Dave is responsible for ensuring Ryman’s strong financial performance.
This includes building relationships with shareholders, the wider investment
community and Ryman’s banking partners. He is a board member of the New
Zealand Retirement Villages Association. Dave has a Bachelor of Commerce
degree and is a Chartered Accountant. Before joining Ryman, he worked as an
accountant and auditor.
MichellePerkins,InvestorRelationsManager
Michelle joined Ryman in 2017. Prior to joining Ryman, Michelle was a Senior
Research Analyst at CraigsInvestment Partners and member of the company’s
Investment Committee where her responsibilities included strategic asset
allocation for the group.
Michelle’s association with the company dates back to the early 2000s when she
was the healthcare analyst covering Ryman for CraigsInvestment Partners.
44
4
Contents
Offer highlights.............................5
Introducing Ryman Healthcare......6
Funding and security structure.....19
Financial performance.................30
Offer terms and timetable............35
Appendices...................................40
Edmund Hillary,
Auckland
5
Offer highlights
Retail bond offer
IssuerRyman Healthcare Limited (Ryman)
BondsFixed rate, secured, unsubordinated Bonds
Guarantee and
security
Payments onthe Bonds are guaranteed by each of Ryman’s
Subsidiaries under a cross guarantee in the Security Trust Deed.
The Bondholders have the benefit of the same security
package as Ryman’s bank lenders and any other debt funding
providers who become Beneficiaries under the Security Trust
Deed
Issue size
Up to $100 million (plus oversubscriptions of up to $50 million
at the sole discretion of Ryman)
Maturity6 year Bonds maturing Friday, 18 December 2026
RatingNot rated
Quotation
The Bonds are expected to be quoted on the NZX Debt Market
on Monday, 21 December 2020
Joint lead
managers
ANZ, Forsyth Barr, Hobson Wealth, Westpac
The purpose of the Offer is to provide diversity of funding sources and tenor. The proceeds of the Offer will be
used to repay a portion of Ryman’s existing bank debt. This will provide Ryman with additional headroom under
Ryman’s Bank Facility Agreement which it can drawdown as required.
66
6
Introducing
Ryman
Healthcare
Nellie Melba,
Melbourne
7
Ryman overview
The largest retirement village operator in New Zealand,
Ryman was founded in 1984 on the basis that older people
deserve dignity and the highest standard of care
Founding philosophy is that Ryman’s care has got to be
g
ood enough for Mum or Dad
NZX Listed in 1999, Ryman is currently by market
c
apitalisation in the top 6 New Zealand-Incorporated listed
companies
Owner and operator of 39 retirement villages in New
Z
ealand and Australia and is home to more than 12,000
residents
Named by Reader’s Digesta
s the most trusted brand in the
New Zealand retirement industry in 2020 for a sixth time
“Gold Standard” of care, with 81% of Ryman’s New Zealand
V
illages receiving the highest government accreditation,
compared to 50% for other large operators†
†
Operators with more than 15 facilities
8
Our competitive advantage
Brand reputation, 36 years, over 30,000 residents over this
time
Experienced leadership team
Bespoke Ryman designed villages
In-ho
use development and construction
Ryman peace of mind guarantees
Full continuum of care – i
ncluding dementia care
Continued innovation for residents and staff
Benefits of increasing scale
Established operations and development pipeline in Victoria
“It’s got to be good enough for Mum or Dad”
9
Village locations
39 strategically located villages, 36
in New Zealand and 3 in Victoria,
Australia
Geographically diverse, with the
m
ajority of villages located in
established markets with high
population centres
25 villages are located in the North
I
sland of New Zealand, with 10 of
these in Auckland, New Zealand’s
most populous urban area
A pipeline of 16 future villages
a
cross New Zealand and Victoria
New ZealandVictoria
10
COVID-19 care response
Both New Zealand and Australia have respondedto the virus with strong public health measures and a range of
economic stimulus packages
Ryman is not unfamiliar with infectious diseases, and activated its infectious diseases protocol in January 2020
Ryman has infection control and pandemic plans in place and its clinical governance committee has been
o
verseeing plans
Early measures taken included:
purchasing additional supplies of personal protective equipment
closing care centresa
nd serviced apartments to external visitors
arranging grocery and food deliveries to villages
Flexible protocols adopted, allowing Ryman staff and residents to adapt quickly to varying alert levels and lockdown
r
estrictions
No cases of COVID-1
9 have been reported among Residents or staff as at 25 November 2020
11
Continuum of care
Independent living
Average age of entry 79.6 years
Assisted living
Average age of entry 86.0 years
Aged care: rest home / hospital
/ dementia
Continuum of care
The continuum of care offering plays an
important role in the decision-making process
of residents considering moving into a
retirement village
The certainty, security and peace of mind that
comes from this offering is of importance for
residents as they age
Couples are able to stay together as they age,
and the offering gives families the comfort of
knowing their parents or grandparents can be
cared for as their health needs change
Average age of entry is the median age that the current residents at Ryman villages (at 30 September 2020) were when they entered their unit.
12
Around 50% of Ryman’s portfolio is needs based
Source: Oceania does not disclose the split of care beds in their villages. Figures based on each company’s latest financialreports and disclosures published on
NZX as at 20 November 2020.
02,0004,0006,0008,00010,00012,000
Ryman
Metlifecare
Summerset
Arvida
Oceania
Beds / units
Resthome / HospitalDementiaAssisted livingIndependent living
13
Continuum of care offering is rare in Australia
Source: Data based on ASX disclosures as at 21 November 2020 for ASX listed operators. For unlisted operators, data was sourcedfrom their websites and the
Aged Care Services List, Australia as at 21 November 2020
-2,0004,0006,0008,00010,00012,00014,000
Ryman (NZ + Australia)
Lend Lease
Stockland
Retire Australia
Australian Unity
Opal
Regis
Estia
Allity
Japara
Care beds & serviced apartmentsRetirement village units
14
Ryman’s earnings streams
Care fees
Receive weekly fee for service and achieve margin
New sales
Development margin on the initial occupation right sale (typically 20% to 25%)
Resales
Collect price to price gain for existing unit occupation rights when residents change
Management fee
20% of the occupancy advance paid by independent and serviced unit residents,
collected on repayment
15
VillagesDesign Consenting Council Construction VillageFinal
approval openstages
Development activity
(at 30 Sept 2020)
Ryman is diligent in site selection for its new
villages
Development is primarily managed in-ho
use
by Ryman’s experienced development,
design and construction teams
This strategy has allowed Ryman to develop
ne
w villages in well-established areas and
invest for future growth
Nellie Melba
Murray Halberg
William Sanders
Linda Jones
John Flynn
Highton
Aberfeldie
Ocean Grove
Highett
Coburg
Mt Martha
Mt Eliza
Ringwood East
Miriam Corban
James Wattie
Hobsonville
Riccarton Park
Northwood
Kohimarama
Park Terrace
Karori
Newtown
Takapuna
16
Land bank of 6,171 beds and units
Ryman’s land bank consists of undeveloped
land on both existing and new village sites
Local councils issue the required building
c
onsents to permit the development of new
villages
Land bank at existing village sites represents
o
pportunities to expand the village to meet
local demand and enhance residents’
experiences
Ryman’s current land bank supports around
fo
ur years of its targeted medium-term
build rate of 1,600 beds and units per year
Land Bank Consent (Beds and Units)
1,398
2,207
2,630
2,912
3,969
3,808
2,813
3,347
3,322
3,681
2,626
2,363
0
2,000
4,000
6,000
8,000
201620172018201920202021*
Consented
Not consented
* 2021 data as at 30 September 2020. All other data as at 31 March.
1717
Construction is underway at all sites shown. All images are artist impressions of the completed villages based on latest designs.
Aberfeldie
Riccarton
18
Our corporate citizenship
Our commitment to be a good corporate citizen focuses on doing the right things for
our residents and their families, staff, the broader community and stakeholders
We believe it is a privilege to care for our elderly and share in their life story. We are
c
ommitted to continued innovation in the way we care for our residents – from the
sustainable design and construction of our villages (
11 principles of sustainable design)
through to improving the health and wellbeing of our residents (
Ryman Prize,
Medications Advisory Committee)
We have a strong culture anchored in providing care that has got to be “good enough
fo
r Mum and Dad”
Health, safety & wellness is a top priority and we are dedicated to the ongoing
bet
terment of the health, safety and general wellness of our employees, residents and
broader Ryman family
Experienced leadership team with a long-t
erm focus and high ethical standards
We build warm, energy-ef
ficient homes and communities specifically designed for the
needs of older people, freeing up homes in the broader community for families to live in
We’re building critical aged care infrastructure that is otherwise not being built
a
lleviating pressure on the public healthcare system
We’re committed to a journey of reducing greenhouse gas emissions, waste
m
inimisation and conserving water resources (
Ryman Healthcare sustainability
framework
, member of Toitūcarbonreduce programmesince 2017)
Sustainability leadership group established in 2018 with the aim of bringing a co-
o
rdinated approach to the way Ryman approaches sustainability
Key to Ryman’s success is its people and culture. We are committed to the professional
&
personal development of our team members and ensuring all staff are treated fairly
and equally with respect and kindness, regardless of their gender or heritage
Supporter of local communities, national charities and organisations through
s
ponsorship and volunteering
1919
19
Funding
and security
structure
Bert Sutcliffe,
Auckland
2020
Purpose of debt
Debt is primarily used to develop Ryman villages
The Ryman Group’s principal use of debt is to facilitate the
a
cquisition of land for development, the development and
construction of Villages, and to manage the timing of Unit
sales to Residents for developed and existing Villages
The debt is working capital debt with the proceeds from the
fi
rst time sale of Units used to repay debt
Debt fluctuates depending on the level of land acquisition
a
nd development activities
The purpose of the Offer is to provide diversification of
f
unding sources and tenor. The proceeds from the proposed
bond issue will be used to repay a portion of Ryman’s
existing bank debt. This will provide Ryman with additional
headroom under its Bank Facility Agreement to drawdown
further amounts as required
As at 30 September 2020 – excluding bond issuance
Net drawn debt ($m)2,109.4
Facilities’ limit ($m)2,309.6
Facilities’ headroom ($m)200.2
Bank lenders
ANZ, Bank of China,
BNZ/NAB, CBA, ICBCNZ,
MUFG and Westpac
Debt facility maturity profile (NZD)
* Assumes the issuance of a 6 year $150m retail bond
AUD debt converted to NZD using the exchange rate as at 30 September 2020
As documented in the Group's facility agreement the Group has a right to off-set cash
balances held against bank debt. Net drawn debt is total secured bank loans net of cash held
at 30 September 2020.
-
$0.2bn
$0.4bn
$0.6bn
$0.8bn
$1.0bn
FY21FY22FY23FY24FY25FY26
New retail bond*Bank facilities
2121
Additional funding
As at 24 November 2020, the limit of the facilities available under the Bank Facility Agreement is $2,395m. To further diversify
sources and tenor of debt funding, Ryman is investigating a number of additional debt funding options, including an issue of
USPP notes and other arrangements with institutional lenders. These transactions may be completed relatively soon after the
date of this PDS.
While details of such funding arrangements have not been confirmed as at the date of this PDS:
as the proceeds of such funding are intended to be solely used to repay a portion of Ryman’s existing bank debt, it is not
e
xpected that such additional funding will itself result in an increase in Ryman’s total liabilities; and
it is expected that the providers of such debt funding will be Beneficiaries entitled to the benefit of the Security under the
S
ecurity Trust Deed (and will rank equally for repayment with the Bonds).
22
Capital recycling
Search
and
acquire
site
Resource
consent
Construction and village
opening
Compounding recurring cashflows
01234567891011121314
Cash
Returns
Recycled
Capital
Cash
Investment
Peak
investment
on
opening
Cash back as
residents move in
Year
Optimally, cash flow generated from
the sale of Occupation Agreements
for its independent units and
serviced apartments supports the
development of the entire village
including the communal and aged
care facilities
Refundable Accommodation
Deposits provide an additional
source of capital
Cumulative village cash flow profile
23
Security structure
Ryman ultimately owns all the companies
within the Ryman Group, including each
Village Company
Ryman is listed on the NZX and is the issuer
o
f the Bonds
The Ryman Group provides general security
o
ver all its assets in favour of the Security
Trustee (subject to the security sharing
arrangements with the Statutory Supervisor)
Note: Assets of each entity/category exclude shares held by that entity/category in subsidiaries of that
entity/category and intercompany loan balances within the Guaranteeing Group. Also, further details of the
securities held by the Security Trustee and their ranking is contained on slides 24 to 26.
Ryman Healthcare
Limited
Listed bond issuer
Total assets: $381m
Ryman Healthcare
(Australia) Pty Ltd
Total assets: $72.9m
Ryman Aged Care
(Australia) Pty Ltd
Total assets: $1.5m
Other Australian
non-Village
Companies
Total assets: $197.2m
Ryman Construction
Pty Ltd
Total assets: Nil
NZ Subsidiaries that
are non-Village
Companies
Total assets: $78.7m
NZ Village
Companies
Total assets: $6.65b
Statutory
Supervisor
/ Resident
Mortgage
Guaranteeing Group
100%
100%
100% in
each
100%
100% in
each
100% in
each
Ryman Group Security Structure – as at 30 September 2020
Bond Supervisor
Banks
Security Trustee
Statutory
Charge
Ryman Group
Total assets: $8.34b
Australian Village
Companies
Total assets: $959.1m
100% in
each
24
Security – Ryman Group balance sheet at 30 September 2020 ($bn)
Assets of $4.93bn available as security at 30 September 2020
Total assets as at 30 September 2020 of
$8.34bn
Assets of $4.93bn after deducting amounts
p
ayable to Residents, supporting liabilities
secured by the Security of approximately
$2.13bn
New Zealand Permanent Trustees Limited is
t
he Security Trustee
Public Trust is the Bond Supervisor
* Assuming $150 million of Bonds are issued under the Offer, which will be applied towards repaying an equivalent portion of bank debt.
Figures included in the chart above are rounded to two decimal places.
4.93
2.45
0.03
0.01
3.37
2.13
0.34
8.34
Total AssetsLiabilities
preferred by
law
Permitted
secured
liabilities
Liabilities
secured by
the Statutory
Supervisor's
Mortgage,
Resident
Mortgage
and Statutory
Charge
Assets
Remaining
Banks and
Bondholders
Other
Liabilities
Total Equity
25
Security
The Bondholders will share the benefit of the same security package as Ryman’s banks and any other debt funding
providers who become Beneficiaries under the Security Trust Deed on a pro rata basis. This security is held by the
Security Trustee.
The Securities held by the Security Trustee are:
1.first ranking registered mortgages over:
a.all land and buildings owned by NZ Guarantors that are not NZ Village Companies. This includes bare
l
and and land that is under development and not yet used for operational retirement villages;
b.any land and buildings owned by NZ Guarantors that are NZ Village Companies which are on separate
l
egal titles to any land allocated for Units. This generally includes hospital facilities, Community Facilities
and care centres (but only if that care centre does not contain any Care Suites);
2.second ranking registered mortgages over the care centre of any NZ Village Company but only if that care
c
entre includes any Care Suites; and
3.general security interest over all the assets of Ryman and each Guarantor under the General Security
A
greements.
No registered mortgages are held in respect of any Australian Guarantor. However, the Security Trustee has an
unr
egistered security interest in each Australian land holding Guarantor under the general security (which will rank
behind the Statutory Charge).
26
Security (continued)
Each NZ Village Company provides first ranking mortgages to the Statutory Supervisor over all land and buildings
owned by that NZ Village Company containing Units and the land on which a care centre of any NZ Village
Company is located where the care centre includes Care Suites.
All proceeds of enforcement received under the Security Trustee’s New Zealand GSA and/or the Security Trustee’s
M
ortgages and the Statutory Supervisor’s Mortgage are applied in accordance with the Security Sharing Deed and
the Security Trust Deed.
Under the Security Sharing Deed the Statutory Supervisor is entitled to the proceeds of enforcement in priority to
t
he Security Trustee to the extent that the proceeds relate to a Unit, the land on which the Unit is located and/or
land on which a care centre is located (but only where that care centre includes any Care Suites). The remaining
enforcement proceeds will be shared between the Beneficiaries (including the Bondholders) on a pro rata basis.
Each Resident of an Australian Village Company has the benefit of a Statutory Charge over the land of the relevant
A
ustralian Village Company to secure that company’s obligation to repay the Australian Resident Loan paid by a
Resident. This charge ranks ahead of the security interest held by the Security Trustee over the assets of the
Australian Village Company.
27
Occupation Agreement and Resident protection
New Zealand
Resident rights are protected in New Zealand by a statutory supervisor. R
esidents acquire occupation rights under an
Occupation Agreement by providing a repayable, interest free loan
Residents’ loans have no set term, are generally repayable on resale of an Occupation Agreement (using proceeds
r
eceived from the new Resident), and are non-interest bearing
The rights of the Resident under an Occupation Agreement are protected by the Statutory Supervisor
If a Village Company had financial problems the Residents’ right to continue to occupy their Unit is protected, and the
R
esidents’ right to receive their repayment sum on receipt of funds from a new Resident is protected
Victoria
There is no statutory supervisor regime in Victoria
The rights of Residents in an Australian Village Company are protected by a Statutory Charge over the land of the
r
elevant Australian Village Company to secure repayment of the refundable component of the Resident’s Australian
Resident Loan under the Australian RV Act. If Ryman fails to pay amounts owing to Residents after they have obtained
judgment against Ryman, the Statutory Charge can be enforced by the Residents on application to the Supreme Court
The relevant Australian Village Company is obliged to repay an Australian Resident Loan (less any applicable deductions)
w
ithin six months after the Resident permanently vacating their Unit, noting the relevant Australian Village Company is
obliged to repay earlier if the unit is sold and settled within the 6 month period.
28
Debtto EquityCovenant
Debt to Equity Covenant
Covenant is aligned to the bank facility covenant
Under this covenant: t
he ratio of Total Liabilities of the
Ryman Group (after deducting the total value of
Resident Occupancy Advances, Australian Resident
Loans and Accommodation Bonds owing or held by
the Ryman Group) to Net Tangible Assets of the
Ryman Group must be no greater than 1.0:1.0
If there is a breach of this covenant, Ryman must,
w
ithin 6 months of the date of a 6 monthly
compliance report being delivered specifying that
breach (or the date on which it should have been
delivered, if earlier), remedy the breach or (if not
remedied within 6 months) give notice to the Bond
Supervisor within 20 Business Days after such date of
its plan to remedy the breach
If the breach is not remedied within 6 months of the
d
ate of that notice (or the date on which it should
have been delivered, if earlier), an Event of Default will
occur
Ryman is compliant with this covenant
The Bond Supervisor does not have the benefit of a
d
istribution stopper for a breach of the Debt to Equity
Covenant unless that breach becomes an Event of Default. But,
under the Bank Facility Agreement Ryman is not permitted to
make a distribution if an Event of Default occurs from a breach
of the equivalent covenant in the Bank Facility Agreement
(unless the lenders under the Bank Facility Agreement waive
their rights)
* As at 30 September. All other data as at 31 March.
† As defined in the Bank Facility Agreement.
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
$0m
$500m
$1,000m
$1,500m
$2,000m
$2,500m
2015201620172018201920202021*
NTA (LHS)Adjusted total liabilities (LHS)†Ratio (RHS)Covenant (RHS)
29
Guaranteeing Group Coverage covenant
Covenant is aligned to the bank facility covenant
Under this covenant: t
he Total Tangible Assets and Adjusted EBIT of the Guaranteeing Group must represent not
less than 90% of the Total Tangible Assets and Adjusted EBIT of the Ryman Group taken as a whole
Currently the Guaranteeing Group comprises 100% of the Ryman Group
A breach of this covenant is an Event of Default if: (1) it is not remedied within 30 days after Ryman becoming
a
ware of the breach; and (2) the default is, or is likely to be (in the reasonable opinion of the Bond Supervisor)
materially prejudicial to Bondholders
Ryman is compliant with this covenant
F
inancial covenants may change
Under the Trust Deed these financial covenants are subject to change but only where the equivalent covenant in the
Bank Facility Agreement is changed and Ryman has certified to the Bond Supervisor that the change is more
favourable to the Bondholders (if it applied to the Bondholders) than the relevant financial covenant.
3030
30
Financial
performance
Bruce McLaren,
Auckland
31
Historical annual financial performance (31 March)
Year ended 31 March201520162017201820192020
Revenue$m227.1261.1289.2342.5382.3423.9
Underlying profit (non-
GAAP)
$m136.3157.7178.3203.5227.0242.0
Reported net profit after tax$m241.9305.4356.7388.2326.0264.7
Net operating cash flows$m234.0315.5322.8349.3401.4449.8
Total assets$m3,312.13,973.54,944.85,796.96,651.57,677.2
Total interest bearing debt$m407.2544.9837.51,060.51,324.01,741.6
Net assets$m1,101.31,327.51,652.11,940.52,170.12,301.0
Interest-bearing debt to
interest bearing debt plus
equity ratio
%27%29%34%35%38%43%
Underlying profit increased from
$136.3m in 2015 to $242.0m in 2020
Similarly, net operating cash flows
in
creased at a CAGR of 14.0% since
2015, from $234.0m to $449.8m in
2020
Total assets increased from $3.3bn to
$7.
7bn during this period
Underlying profit is a non-GAAP (Generally Accepted Accounting Principles) measure and differs from NZ IFRS profit for the period. Underlying profit does not have a standardised meaning
prescribed by GAAP and so may not be comparable to similar financial information presented by other entities. The Ryman Groupuses underlying profit, with other measures, to measure
performance. Underlying profit is a measure that the Ryman Group uses consistently across reporting periods.
Underlying profit excludes deferred taxation, taxation expense, and unrealised gains on investment properties because these items do not reflect the trading performance of the Ryman
Group. Underlying profit is used as the basis for determining the dividend pay-out to shareholders.
32
Historical annual
underlying profit
growth
-
$50m
$100m
$150m
$200m
$250m
2002200320042005200620072008200920102011201220132014201520162017201820192020
33
Capital management
Gearing ($m)
30 Sept 202031 March 202031 March 2019
Interest bearing debt
$2,130$1,742 $1,324
Net assets
$2,454$2,301 $2,170
Total assets
$8,337$7,677 $6,651
Interest bearing debt / (Interest
bearing debt + equity)
46.5%43.1%37.9%
Interest bearing debt /total assets
25.6%22.7%19.9%
Total assets & interest bearing debt
At 30 September 2020, Ryman’s assets
totalled$8.34bn with interest bearing
debt of $2.13bn, representing a gearing
level of 25.6%
Interest bearing debt / (interest bearing
d
ebt + equity) was 46.5% at 30
September 2020
$0.50
$0.54
$0.70
$0.84
$0.95
$1.06
$1.21
$1.32
$1.51
$1.74
$2.13
$3.60
$3.97
$4.42
$4.94
$5.28
$5.80
$6.18
$6.65
$7.26
$7.68
$8.34
$0bn
$3bn
$6bn
$9bn
Sep-15Mar-16Sep-16Mar-17Sep-17Mar-18Sep-18Mar-19Sep-19Mar-20Sep-20
Gross interest bearing debtTotal assets
34
Annual investing
cash flow
Investing cash flow
$204m
$249m
$350m
$296m
$430m
$497m
$78m
$65m
$97m
$111m
$54m
$101m
$7m
$31m
$35m
$27m
$35m
$44m
$12m
$24m
$42m
$44m
$33m
$39m
$30m
$0m
$200m
$400m
$600m
$800m
201520162017201820192020
New villagesPurchase of land
Care / systems / projectsVillage upgrades
Bed licences
3535
35
Offer
terms and
timetable
Evelyn Page,
Orewa
3636
Key terms of the offer
IssuerRyman Healthcare Limited
DescriptionThe Bonds are fixed rate, secured, unsubordinated bonds
Guarantee
Payments on the Bonds are guaranteed by each Subsidiary of Ryman (including the Village Companies) under a cross guarantee in
the Security Trust Deed
Security
Bondholders have the benefit of the same security package as Ryman’s bank lenders and any other debt funding providers who
become Beneficiaries under the Security Trust Deed
Term and maturity date6 years, maturing 18 December 2026
Offer amountUp to $100 million plus oversubscriptions of up to $50 million at the sole discretion of Ryman
Interest rate
Sum of the Issue Margin and the Swap Rate, but in any case will be no less than the minimum Interest Rate.The Interest Rate will
be announced by the Issuer via NZX on or shortly after the Interest Rate Set Date
Interest payment
Interest will be paid quarterly in arrear in equal amounts on 18 March, 18 June, 18 September and 18 December (or if that dayisnot
a Business Day, the next Business Day) of each year up to and including the Maturity Date
The first Interest Payment Date will be 18 March 2021
PurposeThepurpose of the offer is toprovide diversification of funding sources and tenor for Ryman
Financial covenants
Bondholders have the benefit of the following covenants:
•
Debt to Equity Covenant - the ratio of Total Liabilities of the Ryman Group (after deducting the aggregate value of all Resident
Occupancy Advances, Australian Resident Loans and Accommodation Bonds owing or held by the Ryman Group) to Net Tangible
Assets of the Ryman Group is no greater than 1.0:1.0; and
•
Guaranteeing Group Coverage Covenant -the Total Tangible Assets and Adjusted EBIT of the Guaranteeing Group must represent
not less than 90% of the Total Tangible Assets and Adjusted EBIT of the Ryman Group taken as a whole
Minimum application amount$5,000 and multiples of $1,000 thereafter
Brokerage0.50% brokerage plus 0.50% on firm allocations paid by Ryman
Credit ratingNot rated
Early redemption
Neither Bondholders nor Ryman can redeem the Bonds before the Maturity Date. However, Ryman may be required to repay the
Bonds early if there is an Event of Default (as described in the PDS and the Master Trust Deed)
ListingApplication has been made to NZX to quote the Bonds on the NZX Debt Market under the ticker code RYM010
3737
Key dates of the offer
Retail bond offerDate
PDS lodgement dateThursday, 26 November 2020
Opening date
Monday, 7 December 2020
The minimum Interest Rate and the Indicative Margin are
expected to be announced on this date
Closing dateThursday, 10 December 2020, 1pm
Interest Rate Set dateThursday, 10 December 2020
Issue date and allotment dateFriday, 18 December 2020
Expected date of initial quotation and trading of the Bonds
on the NZX Debt Market
Monday, 21 December 2020
Interest payment dates
18 March, 18 June, 18 September, 18 December in each year
until Maturity Date
First interest payment date18 March 2021
Maturity Date18 December 2026
38
Key investment highlights
Provide essential aged-care infrastructure
with high barriers to entry
Strong demand supported by
demographic shift to older population
Sustained occupancy rates above industry
average
Resilient through property market cycles
Experienced leadership team with a long-
term focus and high ethical standards
Strong cash flow, financial performance
and earnings growth
3939
Questions
Appendices
40
4141
Board of directors
Dr David Kerr
MB CHB,
FRNZCGP
CHAIR
Jo Appleyard
LLB (HONS)
Warren Bell
MCOM, FCA
George Savvides
AM, BE (HONS),
MBA , FAICD
Claire Higgins
BCOM, FCPA,
FAICD
Geoffrey
Cumming
BA (HONS), MSC
(ECON), LLD
Anthony Leighs
NZCB
Paula Jeffs
BA (Psych &
Media), Grad Dip
(IR), GAICD, CAHRI
David joined Ryman’s
board in 1994 and
has held the role
ofchairsince 1999. A
general practitioner,
David is a fellow and
past president of the
New Zealand Medical
Association and was
awarded a Fellowship
with Distinction by
the Royal New
Zealand College of
General Practitioners.
He is chair of
CentercareLimited
and a director of
Forté Health.
Jo is a partner at
Chapman Tripp. She
is a skilled advocate
and litigator
specialising in
commercial,
employment, and
resource
management law. Jo
was a member of the
New Zealand Markets
Disciplinary Tribunal
between 2011 and
2020.
Warren joined the
board in 2011. He is
an experienced public
and private company
director and was
previously an audit
partner. He is
currently chair of
HallensteinGlasson
and St George’s
Hospital, and is a
director of several
private companies.
George lives in
Melbourne and has
20 years’ experience
in Australia’s
healthcare industry.
After 14 years as
managing director of
Medibank, Australia’s
largest health insurer,
he retired in 2016.
George joined
Ryman’s board in
2013 and is chair of
NextScience Limited
and Special
Broadcasting Service.
He is also a Fellow of
the Australian
Institute of Directors.
In 2020 he was made
a Member of the
Order of Australia.
Based in Victoria,
Claire is a director
and consultant with
board experience in
Australia and New
Zealand. She joined
Ryman’s board in
2014 and is chair of
REI Superannuation
Pty Ltd, and holds
director positions in
the property, health,
and philanthropic
sectors. Claire is chair
of the Audit and
Financial Risk
Committee and the
Health, Safety and
Wellbeing
Committee.
Geoff re-joined the
board in June 2018,
having previously
served as a director
from 1999 to 2000.
He is a Canada-based
New Zealand citizen
who is an economist,
investor, and
philanthropist. He has
more than 30 years’
experience as a chief
executive and as a
company director,
having served on
more than 25
corporate boards in a
wide range of
countries and
industries.
Anthony is managing
director of Leighs
Construction, which
he founded in 1995
and built into one of
New Zealand’s
leading commercial
construction
contractors. He is a
former chairman of
the New Zealand
Registered Master
Builders’ Association.
Anthony joined the
Ryman board in 2018.
Paula is a Melbourne-
based human
resources executive
with experience
across healthcare,
finance and
government sectors
and deep expertise in
workforce planning,
organisational
capability and
executive coaching.
In the early stages of
her working life,
Paula spent several
years as a carer in the
Aged and Disability
sector.
4242
Senior executive team
Gordon MacLeod
CHIEF EXECUTIVE
David Bennett
CHIEF FINANCIAL
OFFICER
Jeremy Moore
CHIEF
DEVELOPMENT
OFFICER
Cheyne Chalmers
CHIEF OPERATIONS
OFFICER
Mary-Anne Stone
ACTING CHIEF SALES
AND MARKETING
OFFICER
Andrew Crerar
HEAD OF PEOPLE
AND CULTURE
Rick Davies
HEAD OF
TECHNOLOGY AND
INNOVATION
Gordon joined Ryman in
2007. He had previously
been a corporate finance
partner with PwC and
finance director of a
London listed hi-tech
engineering company.
Gordon has a Bachelor of
Commerce degree and
he is a Fellow of
Chartered Accountants
Australia and New
Zealand. His association
with Ryman dates back
to 1994 when his Nana
moved in to Margaret
Stoddart Retirement
Village in Christchurch.
Dave joined Ryman in
2013 and was promoted
to Chief Financial Officer
in 2017. Dave is
responsible for ensuring
Ryman’s strong financial
performance. This
includes building
relationships with
shareholders, the wider
investment community
and Ryman’s banking
partners.He is a board
member of the New
Zealand Retirement
Villages Association.
Dave has a Bachelor of
Commerce degree and is
a chartered accountant.
Before joining Ryman, he
worked as an accountant
and auditor.
Jeremy is an experienced
property executive in the
retirement sector. He has
been a senior member of
the Ryman development
team since 2012 and was
appointed Chief
Development Officer in
January 2020. He holds a
Bachelor of Commerce
and Management
degree.
Cheyne joined Ryman in
2020. She has worked in
senior roles in public
health, including as
Executive Director of
Residential and Support
Services, Chief Nursing
and Midwifery Officer at
Monash Health, Victoria,
and has been influential
at a state and national
level. She is also an
adjunct professor at
Deakin University.
Cheyne is a Registered
Nurse and has built a
successful career in New
Zealand, including being
the nurse lead on various
significant healthcare
initiatives
Mary-Anne has over 25
years’ experience in the
healthcare sector in roles
ranging from village
manager (with Ryman
several years ago) to
business development
and general practice
management. Mary-
Anne has a Masters in
Population Health
focused on health
systems for ageing
populations and health
equity. Mary-Anne re-
joined Ryman in 2020.
Andrew joined Ryman in
early 2018 as People
Development Manager.
Before joining Ryman,
Andrew completed a
Masters of Economic
Psychology and worked
in the public health
sector in the UK. He was
promoted to Group
People Development
Manager in 2019 before
moving into his current
role in 2020.
Rick joined Ryman in
2019. He has a Bachelor
of Science degree and
previously worked for
nine years at Trade Me in
a variety of senior
leadership roles
spanning digital product
management,
commercial management
and running Trade Me’s
new goods marketplace
business.
43
Deferred
management fee
$100,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
First residentSecond resident
Repayment to
outgoing resident
$400,000
Occupancy Advance
from resident
Development
margin (20% to
25%)
Cost to build
unit $400,000
$500,000
$600,000
Resale gain $100,000
5 years
Retirement village model
The above graph is provided for illustration purposes on how Occupation Agreements typically work
Note: Retirement village model applies to independent units and assisted living units
Receive $500,000 capital sum from first resident. Cost to build $400,000, net cash gain (development margin)
$100,000
Receive $600,000 from second resident, repay first resident $400,000. Deferred management fee collected on
repayment $100,000 (20% of $500,000) and resale gain is $100,000 ($600,000 less $500,000 original occupancy
advance).
Residents enter an Occupation Agreement
under which they are granted a right to
occupy a Unit for the remainder of their life
and a bundle of services
In return the Resident pays an interest free
O
ccupancy Advance, weekly fees and deferred
management fees
Generally, the outgoing Resident is repaid
t
heir Occupancy Advance, less the accrued
deferred management fee, when a new
Resident settles their Occupancy Advance
(usually on the possession date)
Units are typically priced below a standard
r
esidential dwelling in the surrounding area,
allowing buyers to free up capital when they
sell their home to purchase rights under an
Occupation Agreement
44
Retirement village model cash flows
1 Initial capital sum of $500,000 less 20% deferred management fee (being 4% for 5 years for an independent unit)
2 Initial capital sum of $500,000 plus 20% capital gain (at 4% for 5 years for an independent unit)
Single retirement village unitCash flows
When first built
Cost to build unit
-$400,000
Receive capital sum from first resident+$500,000
Net cash gain+$100,000
When unit vacated (eg. after 5 years)
Repay capital sum to first resident
-$400,000
1
Receive capital sum from second resident+$600,000
2
Net cash gain+$200,000
45
Glossary
Australian RV Act
The Retirement Villages Act 1986 (Vic)
Australian Resident
Loan
Any incoming contribution and/or loan provided to the
Ryman Group by a Resident of an Australian village
Australian
Subsidiary
Any Subsidiary of Ryman incorporated in Australia
Australian Village
Company
Any Subsidiary which owns and operates a Village in
Australia
Bank Facility
Agreement
The syndicated facility agreement dated 13 October 2008
(as amended and restated from time to time) between
(among others) Ryman and Ryman Healthcare (Australia)
Pty Limited as borrowers, the Guarantors as obligors, and
the Agent
BondsOffer of bonds described in the presentation
Care Suite
A unit in a care centre operated by a NZ Village Company
which has been designated as a care suite
NZ RV Act
Retirement Villages Act 2003
NZ Village CompanyAny Subsidiary of Ryman that operates a Village in New
Zealand
Occupancy AdvanceThe loan payable by a Resident to the relevant Village
Company under an Occupation Agreement, in exchange
for the right to occupy a Unit or Care Suite (as applicable)
for life
Occupation
Agreement
An occupation right agreement within the meaning of the
NZ RV Act (for Villages in New Zealand) or a residence
contract with the meaning of the Australian RV Act (for
Villages in Australia)
PDSProduct disclosure statement for the offer dated 26
November 2020
Resident Occupancy
Advance
The aggregate amount of all moneys payable by the
Ryman Group to a Resident on the termination of that
Resident’s Occupation Agreement in relation to that
Resident’s Unit or Care Suite pursuant to the NZ RV Act
RymanRyman Healthcare Limited
Security Sharing
Deed
Each deed between a NZ Village Company, the Security
Trustee and the Statutory Supervisor, which sets out how
the proceeds of the security held by the Statutory
Supervisor and the Security Trustee are to be applied
Security Trust Deed
The security trust deed dated 13 October 2018 between
(among others) Ryman, the Guarantors and the Security
Trustee (as amended from time to time)
UnitAny independent unit or serviced unit at a Village
VillageAny retirement village owned by a Group Member that:
in New Zealand is registered as a retirement village
under the NZ RV Act; and
in Australia is registered as a retirement village under
the Australian RV Act
4646
---
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140
26 November 2020
SHAREHOLDER LETTER - RYMAN RETAIL BOND OFFER
Dear Ryman investor,
As a shareholder in Ryman Healthcare Limited (Ryman), I am pleased to make you aware of a
potential investment opportunity. Ryman today announced its inaugural bond offer to New Zealand
institutional and retail investors.
The offer is for up to $100 million, with the ability to accept oversubscriptions of up to an additional
$50 million at Ryman’s discretion. The 6 year, fixed rate bonds will be unsubordinated obligations of
Ryman, and will have the benefit of a guarantee and security package provided by the Ryman
guaranteeing group.
This is a significant milestone for Ryman, being its first retail bond offer. This will provide
diversification of funding sources and tenor to support Ryman to continue to grow and provide
market leading retirement village and aged care facilities to New Zealanders and Australians.
Ryman was founded in Christchurch in 1984 and has grown to become the largest retirement village
operator in New Zealand, as well as a substantial operator in Victoria.
The aim back in 1984 was to improve the range of quality retirement living options on offer for
older Kiwis and to provide the best of care for our residents – care that has got to be ‘good enough
for mum (or dad)’. Those aims have never changed.
Today, 36 years later, Ryman’s 39 retirement villages in New Zealand and Victoria provide homes
and care for more than 12,000 residents and employ more than 6,000 staff.
Ryman is recognised as the most trusted brand in aged care and retirement living in New Zealand
and we consider ourselves an industry leader.
Ryman has consistently lifted standards in the industry by innovating the way villages are built and
the amenities provided, by pioneering new systems of care and by aiming for excellence in clinical
outcomes.
The offer is expected to open on 7 December and close on 10 December 2020. The interest rate
for the bonds will be determined by a bookbuild, and is expected to be announced via the NZX on
10 December 2020. As noted above, the offer is only being made to investors in New Zealand. No
action has been taken or will be taken to permit a public offering of bonds in any jurisdiction other
than New Zealand.
Ryman Healthcare Ltd, 92 Russley Rd, Avonhead, Christchurch 8140
Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market
and all the requirements of NZX relating thereto that can be complied with on or before the
distribution of this letter have been duly complied with. However, the Bonds have not yet been
approved for trading and NZX accepts no responsibility for any statement in this letter.
To participate in the offer you will need to contact a Joint Lead Manager or your usual financial
advisor. Phone numbers for Joint Lead Managers are provided at the end of this letter. There is no
public pool, which means that all of the bonds will be reserved for clients of the Joint Lead Managers,
NZX participants and other approved financial intermediaries.
Full details of the offer are contained in the Product Disclosure Statement (PDS). The PDS is
available by contacting a Joint Lead Manager, your usual financial advisor, or through our website:
www.rymanhealthcare.co.nz/investors/bonds. The PDS must be obtained by investors before they
acquire any bonds.
Thank you very much for your support of Ryman.
Yours sincerely
Dr David Kerr
Chairman
Joint Lead Managers
0800 269 476 0800 367 227
0800 742 737 0800 942 822
Contacts:
For investor relations information contact Michelle Perkins, Investor Relations Manager, on 027 222
9684 (+64 27 222 9684) or email michelle.perkins@rymanhealthcare.com
For media information or images contact David King, Corporate Affairs Manager, on 021 499 602
(+64 21 499 602) or email david.king@rymanhealthcare.com
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