Australian investment group Macquarie CountryWide Trust (MCW.AX) has agreed to sell U.S. property assets for $1.3 billion to a joint venture including Californian state pension fund Calpers, it said on Friday.
The trust, managed by Australia's biggest investment bank Macquarie Group (MQG.AX), said the sale would have a negative impact on earnings, but would reduce debt and gearing levels helping its shares jump as much as 21 percent.
The portfolio, owned in partnership with Regency Centers (REG.N), would be sold to Global Retail Investors, a joint venture between the California Public Employees' Retirement System (Calpers), the biggest U.S. public pension fund, and an affiliate of First Washington Realty Inc.
Macquarie Group's debt-funded investment model has struggled in the wake of the global credit crisis, which cut access to funding, slashed asset values and slowed economic growth.
The Macquarie CountryWide sale comes a day after another Macquarie-managed company, Macquarie Infrastructure Group (MIG.AX), slashed the value of its portfolio by 28 percent, citing challenging global economic conditions.
Last month, shareholders in Macquarie Communications Infrastructure Group (MCG.AX), an investment fund managed by a subsidiary of Macquarie Group, voted in favor of a $1.3 billion takeover offer from the Canada Pension Plan Investment Board (CPPIB).
The portfolio accounts for about 80 percent of Macquarie CountryWide's assets in the United States and the sale would refocus its portfolio toward Australia and New Zealand, the trust said in a statement.
When completed, the deal would pay off A$1.38 billion ($1.11 billion) of U.S. dollar-denominated commercial mortgage backed securities (CMBS) scheduled to mature in coming years, and release about A$226 million of gross cash proceeds.
The deal would leave the trust's balance sheet gearing at about 36 percent it said.
In announcing its results in March for the half year ended December 31 2008, the trust slashed the overall book value of its portfolio by 10 percent, or $600.8 million, as valuations for commercial real estate continued to come under pressure.
Macquarie CountryWide shares were up 10.7 percent at A$0.57 at 0046 GMT, but rose to as much as A$0.625 after the announcement, outperforming the wider market .AXJO, up 0.5 percent.
($1=1.243 Australian Dollar)
(Reporting by Mette Fraende; Editing by James Thornhill)