Deal: Allen & Overy’s international capital markets group advised Scentre Group on its inaugural US$3 billion ($4.1 billion) subordinated hybrid note issuance, comprising US$1.5 billion of 60-year, non-call six-year notes with a coupon of 4.75 per cent and US$1.5 billion of 60-year, non-call 10-year notes with a coupon of 5.125 per cent.

Area: Capital markets.

Key Players: International capital markets partner Mark Leemen led the Allen & Overy team, which also included partner Stephen Miller and senior associate Minesh Patel advising on English law, and senior associate Matthew Lim advising on US law. The team also included associates Thomas Pertsoulis and Edward Ren.

Deal Significance: ASX-listed Scentre Group raised US$3 billion in new debt, issuing subordinated hybrid notes in the US markets for the first time.

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The retail REIT issued US$1.5 billion of 60-year, non-call six-year subordinated notes with a coupon of 4.75 per cent and US$1.5 billion 60-year, non-call 10-year subordinated notes with a coupon of 5.125 per cent. 

The group said the new financing diversified its sources of capital and was expected to be a long-term feature of its funding. Scentre said it had sufficient long-term liquidity to cover all debt maturities until early 2024.

“Following the issuance, the group will reduce its indebtedness including borrowings under the group’s revolving bank facilities,” the company said. 

The notes were structured to receive 50 per cent equity credit from all three major rating agencies and to be excluded from debt and interest calculations under Scentre’s bank and senior bond covenants.