Centro Properties to skip June 30 coupon payment on exchangeable notes

By Caroline Salls

Pittsburgh, June 26 - Centro Properties Group will not make the $8.75 million coupon payment due June 30 on its $500 million of exchangeable notes in order to conserve liquidity in light of the company's declaring no distribution to ordinary security holders for the six months ended June 30, according to a notice to the Australian Stock Exchange Ltd.

According to the notice, the coupon rate on the exchangeable notes is 5.5%, of which 2% accrues and is added to the principal amount of the notes.

Centro has the right to either pay the remaining 3.5% in cash or elect not to make the payment.

As a result of electing not to make the notes payment, Centro said, a "capital and distribution stopper" will be triggered, meaning that the company will be prohibited from making any distributions to ordinary stapled security holders until the missed 3.5% payment has been made.

Centro said the non-payment of the cash component of the coupon does not constitute an event of default under the exchangeable notes or any of the financing facilities of Centro, Centro Retail Trust or any of Centro's managed funds.

Sydney, Australia-based Centro Properties specializes in the ownership, management and development of shopping centers.

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