Australia-based Wesfarmers Ltd was able to raise AUD 304 million or USD 272 million by selling and leasing back its assets. The properties that were sold and leased were from its hardware store chain Bunnings Warehouse.
A regulatory filing revealed that the transaction was carried out through a lease securitization structure. A special purpose entity acquired and then rented back the fifteen properties covered in the deal. The entity would fund the acqusition through twelve-year senior secured partially amortizing floating-rate notes.
Wesfarmers Finance Director Terry Bowen said in the filing, "The lease securitization represents a continuation of Wesfarmers' strategy to release capital from its balance sheet. Given the depth of Bunnings new store pipeline and high rate of conversion into trading locations, the group will continue its strong focus on recycling capital as these stores are completed."
Westpac Banking Corp helped facilitate the sale of the notes. In an email to Bloomberg, Westpac Banking said that the special purpose entity that bought the properties from Wesfarmers was already able to sell AUD 270.89 million of the secured notes. Goldman Sachs Group and CIMB Group Holdings also served as sale managers and structuring advisers for the deal.
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