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Genesis may raise up to $240M in capital bond offer, replacing old hybrid notes

Monday 11th June 2018

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Genesis Energy is considering a capital bond offer of up to $240 million which would replace $200 million of hybrid notes ahead of an interest rate reset on the securities in July.

The Auckland-based electricity generator and retailer today said it may issue up to $200 million in a general offer of 30-year subordinated unsecured capital bonds to retail and institutional investors, and a further $40 million for existing holders of the company's listed capital bonds. If the offer goes ahead, Genesis said it plans to exercise its right to redeem the existing capital bonds on July 15, when the notes' 6.19 percent annual interest rate is scheduled to reset.

Bank of New Zealand, Deutsche Craigs and Forsyth Barr were appointed joint lead managers of the offer and Craigs Investment Partners as organising participant.

Genesis expects to release full details of the offer before it opens next week.

The power company trimmed $75 million from the existing capital offer in 2013 after Standard & Poor’s changed its criteria for assessing the equity content of such instruments. That review let the power company modify the issue of 2041 notes, which were paying a coupon of 8.5 percent at the time.

Genesis had adjusted net debt of $1.16 billion as at Dec. 31, down from $1.21 billion a year earlier.

The capital notes last traded at $1.01 per $1 face value, while Genesis shares recently gained 0.6 percent to $2.515, having dipped 0.8 percent so far this year.

(BusinessDesk)

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