Mirvac’s capital raise irks

By the time Mirvac’s $400 million capital raise for its GE acquisition closed on Monday it was three to four times oversubscribed. But new chief executive Sue Lloyd Hurwitz had little time to celebrate the achievement.

The issuance triggered a brouhaha among investment bankers miffed at the decision to award Macquarie Capital the work rather than the group’s long term lenders.

On Wednesday international banks who extended credit lines during the dark days of the global financial crisis were asked to commit to refinancing an existing $300 to $500 million loan.

The syndicate of banks, thought to include JPMorgan and Citi, signed on the dotted line only to discover two days later that one of their competitors had been handed the lucrative capital raise contract.

By Monday it’s thought Mirvac’s chief executive had fielded a string of calls from irate bankers intent on pointing out the etiquette breach.

The lenders were counting on a contractual clause, understood to be inserted during the GFC days, that would enable them to match the terms offered to a competitor.

But in these bullish times the listed property sector is not short on borrowing options. Banks are queuing up to lend to the major trusts and the US debt markets continue to beckon with longer duration, comparatively credit readily available.