Summerset Increases debt facility to facilitate further strong growth
https://www.nzx.com/companies/SUM/announcements/299158
My opinion. Julian Cook's lengthy investment banking background is a very valuable asset to the company here. Clearly they're gearing up for ongoing strong growth and putting in place the structure that facilitates that. Worth noting that SUM make use of comprehensive interest rate swaps contracts that have the effect of fixing their interest for up to ten years at interest rates between 3.54% and 4.47%, (see page 44 of the 2016 annual report). With the company growing so strongly at an average compound growth rate of 48% per annum since listing it makes profound common sense to borrow in a prudent manner at those effective fixed rates to facilitate ongoing growth. Their gearing rate is currently very modest and they already have ~ 6 years land banked supply so one assumes SUM directors and management have a very strong desire to ensure this company is able to take advantage of opportunities as they arise and thrive going forward.
Disc: Hold plenty and looking for even more on any possible future correction.