Successful completion of Placement, underwritten equity raising size increased to $200 million

Charter Hall WALE Limited as responsible entity of the Charter Hall Long WALE REIT (ASX:CLW) (CLW or the REIT), has successfully completed the fully underwritten institutional placement announced on 5 June 2019 (Placement).

Due to strong demand from new and existing institutional investors, the size of the Placement was increased from $180 million to $190 million. Additionally, the Security Purchase Plan (SPP), which was also announced on 5 June 2019, will now be underwritten to $10 million, taking the total underwritten equity raising to $200 million.

J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch have fully underwritten the $190 million Placement and have underwritten the SPP to $10 million.

Proceeds from the Placement and the SPP will be used to partially fund the acquisition of two office properties and the recently announced 50% interest in a long leased prime industrial property for a total consideration of $206 million (Acquisitions).

Including the impact of the Acquisitions, the increased size of the Placement and the underwritten SPP, and barring any unforeseen events and no material change in market conditions, CLW confirms the guidance given on 5 June 2019, being:

• FY19 Operating EPS of 26.9 cents per security; and
• FY20 Operating EPS growth of no less than 3.75%.
  

Including the impact of the Acquisitions, the increased size of the Placement and the underwritten SPP, the REIT's pro forma¹:

• balance sheet gearing is 28.3%;
• look through gearing is 34.9%;and
• net tangible assets is $4.15 per security.
  

Placement

The Placement will raise $190 million through the issue of approximately 40.1 million new securities (New Securities) which will be issued at an issue price of $4.74 per security (Issue Price).

The New Securities will settle on Tuesday, 11 June 2019, with allotment and normal trading to occur on Wednesday, 12 June 2019. New Securities issued under the Placement will rank equally with existing CLW securities and will be entitled to the full distribution for the three months to 30 June 2019, expected to be 7.1 cents per security.

CLW is also undertaking a SPP underwritten to $10 million². Under the SPP, eligible securityholders in Australia and New Zealand will be invited to subscribe for up to $15,0003 of new securities, free of brokerage and transaction costs. The new securities will be offered at a price of $4.669 (being the Issue Price under the Placement adjusted for the 30 June 2019 distribution of 7.1 cents per security). New securities issued under the SPP will rank equally with existing CLW securities from the date of issue, however as they are issued after the record date, new securities will not be entitled to the distribution for the three months to 30 June 2019. Further information on the SPP will be lodged with the ASX and sent to eligible securityholders on Thursday, 13 June 2019.

CLW confirms that, pursuant to ASX Listing Rule 7.1, the Placement and the SPP are within CLW’s existing 15% placement capacity and do not require securityholder approval.

Recommencement of trading

CLW securities are expected to resume trading on the ASX from market open today (Thursday, 6 June 2019).

₁ As at 31 December 2018, adjusted for the acquisition of Henley Beach Hotel by LWIP for $10.3m (CLW share $5.1m), proceeds from the Dec-18 and Mar-19 DRPs of $9.5m, the portfolio revaluation as at 30 June 2019 and ongoing capital management activities

₂ The responsible entity may (in its absolute discretion), in a situation where total demand exceeds $10 million, decide to increase the amount to be raised under the SPP to reduce or eliminate the need for scaleback. This is subject to the total securities issued under the Placement and SPP falling within CLW's existing 15% placement capacity 3 Securityholders are restricted from being issued more than $15,000 worth of securities under an SPP in any consecutive 12-month period. As such, the amount Eligible Securityholders are able to subscribe for under the SPP will be reduced by any amount received under CLW's previous SPP announced on 17 October 2018 and issued on 21 November 2018