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Auckland Airport eyes six-year bond offer

Tuesday 18th September 2018

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Auckland International Airport is planning to offer a six-year retail bond to help fund its ongoing expansion.

The company didn’t specify the size of the offer it expects to open next week. Last month the firm, which has a $75 million floating rate bond maturing next month, said it was considering a $175 million bond issue before the end of the year. 

The airport is joining a slew of firms taking advantage of the drop in interest rates since June to refinance debt or replace more expensive bank facilities. Meridian Energy, Genesis Energy and Spark New Zealand have raised $525 million in the past three months; Property for Industry may issue up to $100 million of seven-year bonds in an offer that opened yesterday.

Auckland Airport is in the midst of a 10-year $1.9 billion investment programme and is committed to keeping its A- credit rating. It is forecasting capex of up to $550 million this year, including completion of an upgrade of its international terminal, enabling work for a new domestic jet facility, and property developments including the new Pullman Hotel and a distribution centre for Foodstuffs.

Last October the firm raised $100 million through a five-and-a-half year retail bond maturing in April 2023. The fixed-rate bonds pay 3.64 percent, a margin of 0.82 percent over the underlying swap rate at the time.

Today the six-year swap rate was about 2.46 percent.


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