Shopping centre giant Scentre Group Ltd (ASX: SCG) has announced that it is raising $778 million in debt in an effort to repay borrowings under the company's revolving bank facilities.
Given the historically low interest rates currently on offer, Scentre Group is one of many Australian companies to have turned to European debt markets recently.
The bond issue will comprise seven-year fixed-rate notes with a coupon rate of 2.375%, and will allow the property giant to reduce its dependence on bank loans to fund its operations. Scentre Group is the product of the global restructure of the Westfield shopping centre brand last year which saw the group split into two different entities.
Scentre owns and operates the brand's Australian and New Zealand assets, while Westfield Corp Ltd (ASX: WFD) is in charge of the international operations. Despite the fact that Scentre Group's shares have outperformed the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) considerably over the last 12 months, they are still trading at a reasonable price at $3.67 per unit. In addition, they offer a compelling 5.7% dividend yield, albeit unfranked.
