APN News trims bond sale to $100M, sets coupon of at least 7.8%

Friday 12th November 2010

APN News & Media set the size of its New Zealand five-year bond sale at $100 million, half the size it had initially flagged, after setting the minimum coupon at the top end of its range to lure investors.

The publisher of the New Zealand Herald had said it may sell $150 million of bonds with the option of $50 million of over-subscriptions, when it first announced the sale on November 8. The coupon will be a minimum 7.8%, at the top end of the 7.3%-to-7.8% range given during presentations this week.

Markets are betting the Reserve Bank will hike the official cash rate 78 basis points from its current 3% over the coming 12 months, according to the Overnight Index Swap curve. New Zealand five-year swaps have climbed about 30 basis points in the last three weeks to about 4.6%.

"This was at the top of our range and we were happy to take what was being offered within the range," chief executive Brendan Hopkins said.

Pressure to offer a higher coupon has been eased by the recent extension of its banking facilities by A$600 million, which gave APN "great flexibility in our funding options," chief financial officer Peter Myers said in a statement.

The media company, whose assets include radio stations, magazines and a bill-board business, has pared back net debt in the past two years by about $207 million to $697 million.The bonds will pay the greater of 7.8% and the margin of 3.1% over swap. The actual rate will be set on December 14.

The March 15, 2016, bonds will go on sale on November 15 in New Zealand and November 20 in Australia. It closes on December 10.

ANZ New Zealand, Bank of New Zealand, Forsyth Barr and Goldman Sachs are managing the sale.

Businesswire.co.nz

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