Kiwi Property wins strong backing for NZ$200 million green bond

NZ$395 million demand fills Kiwi Property bond offer

Kiwi Property Group Limited (NZX:KPG) has secured NZ$200 million through a seven-year fixed-rate senior secured green bond issue, with demand reaching NZ$395 million at the final 1.20% margin. The allocation includes NZ$50 million of oversubscriptions, putting demand at approximately twice the offer size.

The result completes the offer launched through Kiwi Property’s seven-year green bond offer, which had carried a minimum interest rate of 5.55% and an indicative margin range of 1.20% to 1.30%. Kiwi Property said the bookbuild drew strong support from both retail and institutional investors, although there was no public pool and all bonds were allocated through joint lead managers, NZX participants and other approved financial intermediaries.

Final interest rate remains outstanding

The 1.20% margin is now set, but the total interest rate had not been announced when the release was issued. Kiwi Property said it would publish the rate and final terms later on 23 October, leaving the headline yield as the key missing figure from the completed bookbuild.

S&P Global Ratings has confirmed the bonds will be assigned an issue credit rating of BBB+ upon issue. The rating is subject to possible suspension, revision or withdrawal, and applies to the bonds when issued rather than guaranteeing any particular investment outcome.

Debt diversification underpins the offer

Chief executive Clive Mackenzie said the New Zealand debt capital markets were an important part of Kiwi Property’s funding mix, helping the group diversify its funding sources and lengthen its debt maturity profile. He also pointed to the quality of the portfolio, including newly rated NABERSNZ shopping centre assets, in explaining the company’s satisfaction with investor support.

The strong bookbuild gives Kiwi Property a clear funding outcome, but the economics will be easier to assess once the final interest rate and terms are available. The next questions are how the new debt fits into the group’s maturity profile and whether the green bond structure changes its funding cost relative to other available sources.