Macquarie CountryWide announces US portfolio sale

Listed property trust Macquarie CountryWide Trust is selling the equity and debt interests of 30 US shopping centre assets in a bid to reduce its debt and meet its refinancing obligations.

US company Inland Real Estate Acquisitions will be purchasing the interests for approximately $646 million in a two-phase transaction, which upon completion will result in gross proceeds of approximately $240 million and a gearing reduction of 1.8 per cent on a debt to total assets basis.

Macquarie chief executive Steven Sewell confirmed that following completion of the sale, the trust will be in a position to restructure or refinance all debt maturities for 2009, drawing upon approximately $240 million from the sale, among proceeds from other transactions.

“Importantly for unit holders, the transaction is expected to release considerable cash proceeds, with a manageable reduction in earnings for the trust,” Sewell said.

He said the sale will deliver “on the trust’s stated strategy of continuing to selectively sell assets or interests in assets to reduce leverage and provide balance sheet capacity to meet our medium-term refinancing obligations”.

The sale of the interests is at 12 per cent less than the original cost base of the assets, but in a statement to the Australian Securities Exchange the trust said it considered the portfolio price “appropriate in the current challenging capital and debt environment”.

The trust will continue to undertake capital management initiatives, “including selective individual asset sales and entity-level transactions in all markets to further reduce the trust’s borrowings”, Sewell said.