Archive | Debt securities

Local government agency considers 16-year bonds

The NZ Local Government Funding Agency Ltd, set up in 2011 to sell bonds on behalf of member councils, is looking at issuing a 16-year bond in April.

Chief executive Mark Butcher said a bond maturing in 2033 would allow the agency to provide long-dated funding to councils with a better match to their long-dated assets.

It would extend the agency’s debt profile 6 years beyond its longest-dated bond at the moment, which matures in April 2027.

The agency’s bonds trade on the NZX debt market and are rated AA+ (domestic long term) by international credit rating agencies Standard & Poor’s and Fitch Ratings, the same as the Government’s rating.

The agency has issued $6.8 billion of bonds on behalf of its council members, with 7 maturities from 2017-27. However, chair Craig Stobo said in the half-year report issued in February the agency had issued only $595 million of long-dated bonds over the 6 months to December, adding: “While this is in line with statement of intent forecast, it is one of the lowest issuance amounts over a 6-month period, reflecting reduced borrowing demand from our council members.”

The agency has a bond tender scheduled for Wednesday 5 April and will release tender details 2 days earlier. If it decides to proceed with the 2033 bond, it will release details of that on Tuesday 4 April.

Link:
NZ Local Government Funding Agency

Attribution: Company release.

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Meridian launches $150 million bond issue

Meridian Energy Ltd is seeking up to $150 million from investors in its 8-year unsecured, unsubordinated fixed-rate bonds, which will go to a bookbuild and close on Friday 10 March.

The offer of $100 million, plus up to $50 million in oversubscriptions, is to institutional & New Zealand retail investors. There is no public pool.

Meridian expects the bonds will be quoted on the NZX debt market and have a long-term credit rating of BBB+ from Standard & Poor’s.

The bonds have a maturity date of 20 March 2024 and an indicative margin of 1.5-1.6%/year.

Attribution: Company release.

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ASB notes rate 4.2%

ASB Bank Ltd has set the interest rate for its $285 million 5-year fixed-rate notes issue at 4.2%/year. The margin is 1.2%/year.

The whole issue of unsecured unsubordinated notes has been allocated to financial intermediaries for distribution to their clients. There’s no public pool.

They’ll start trading on the NZX debt market next Monday.

Attribution: Company release.

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Meridian considering 7-year bonds

Meridian Energy Ltd said on Wednesday it was considering making an offer of 7-year unsecured unsubordinated fixed-rate bonds to institutional & New Zealand retail investors.

It expects to release full details in early March, when it expects the offer to open.

Attribution: Company release.

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Contact sets bond rate

Contact Energy Ltd has closed its bond issue fully oversubscribed – total $100 million – and set the interest rate at 4.63%/year.

The power company sought $75 million plus up to $25 million of oversubscriptions.

The interest rate reflects a margin of 1.5%/year over the underlying swap rate. The bonds will be issued on 23 February  and will mature on 15 November 2022. They have an investment grade issue credit rating of BBB from Standard & Poor’s.

Attribution: Company release.

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Contact Energy plans 5-year bond

Contact Energy Ltd expects to make a 5-year bond issue for up to $100 million next week.

The company said yesterday it was considering making an offer of up to $75 million, with the ability to accept oversubscriptions of up to $25 million, of unsecured, unsubordinated fixed-rate bonds to institutional investors & New Zealand retail investors.

The company said full details should be released, and the offer should open, next week.  The maturity date will be 15 November 2022.

Contact will use the proceeds to refinance a bond maturing on 13 April and for general corporate purposes.

Attribution: Company release.

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Air NZ confirms $75 million bond offer

Air NZ Ltd confirmed yesterday that it is offering $75 million of 6-year, unsecured, unsubordinated, fixed-rate bonds to New Zealand retail & institutional investors.

The offer opened yesterday, the interest rate will be announced following a bookbuild process, expected to be on 20 October, and the bonds are expected to be issued on 28 October.

As has been common in this round of bond issues by NZX-listed companies, there is no public pool.

Attribution: Company release.

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Z Energy sets bond interest rates

Z Energy Ltd allocated $151 million of bonds in 2 series on Friday after a bookbuild, with ownership of another $190 million to come.

It set the interest rates at 4.01% for the 2021 bonds and 4.32% for the 2023 bonds.

The bonds allocated under Z’s general offer on Friday were $110 million of 2021 bonds and $41 million of 2023 bonds.

The general offer is expected to close on 28 October, once allocations under the exchange offer are decided. The exchange offer, to New Zealand holders of Z’s existing ZEL010 bonds, is expected to close this Friday, 14 October, the day before they mature.

The exchange offer allocations will be made on a first come-first served basis for a total of $100 million of new bonds, out of $90 million of 2021 bonds & $100 million of 2023 bonds. The balance not taken up in the exchange may be offered in an addition to the general offer. There is no public pool.

Attribution: Company release.

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Z Energy seeks $350 million in 2 bond series

Z Energy Ltd announced an offer of up to $350 million of unsubordinated, secured, fixed-rate bonds in 2 series on Friday.

The 2 series are 5-year & 7-year bonds – $250 million in a general offer to New Zealand retail & institutional investors and $100 million in an exchange offer to New Zealand holders of Z’s 2016 bonds, which expire on 15 October.

Z said it would use the proceeds to refinance an existing tranche of bonds which mature on 15 October and to repay some of the bank debt associated with the acquisition of the Chevron NZ business. The company said its net debt position wouldn’t increase.

The outcome of the general offer bookbuild process will determine what’s available in each series under the exchange offer. If the takeup under the exchange offer falls short, Z may offer those bonds under the general offer. The exchange offer is expected to close on 14 October 2016 and the general offer on 28 October.

The 2 bond series:

  • 2021 bonds, maturity 1 November 2021, indicative margin range above the 5-year base rate 1.75-1.85%/year; the interest rate will be no lower than 3.95%/year, and
  • 2023 bonds, maturity 1 November 2023, indicative margin range above the 7-year base rate 1.85-1.95%/year; the interest rate will be no lower than 4.2%/year.

Z will announce the interest rate for each series following the bookbuild process, which is expected to be completed on Friday 7. Z has applied to list the bonds on the NZX debt market.

There’s no public pool.

Integration process

Z’s tender for the sale of the Caltex service station on Fanshawe St, across the road from Victoria Park on the edge of the Wynyard Quarter, closes on Wednesday 12 October.

Z is working through a process to determine the ownership structure for 9 other Chevron sites which are company-owned, independent retailer-operated, and has given notice to the first one to convert to the Z operating model in the second quarter of 2019. If the decision on others is to convert, they’ll be given until the third quarter of 2019.

Z is still analysing the results of its 6-week discovery process to understand the combined business, identify further synergies and how to realise any extra value. It expects to provide an update on the preliminary analysis at the company’s investor day on Wednesday 19 October. Synergies so far are in the middle of its $250-30 million guided range.

Link:
Terms sheet

Earlier stories:
31 August 2016: Fanshawe St site ‘too valuable for a petrol station’
29 April 2016: Commission clears Z Energy to acquire Chevron subject to divestments

Attribution: Company release.

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Kiwi Property bonds at 4%

Kiwi Property Group Ltd said on Wednesday it had closed its $125 million 7-year bond offer fully subscribed, including $50 million of oversubscriptions. There was no public pool.

The interest rate for the fixed-rate senior secured bonds will be 4%/year. They will be issued on 7 September.

Attribution: Company release.

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