Contact Energy considers $100 million retail bond offer

Tuesday 7th February 2017

Contact Energy, which last year said it would focus on reducing debt, is considering a $100 million offer of bonds it plans to list on the NZX debt market.

Wellington-based Contact plans to sell $75 million of unsecured, unsubordinated five-year bonds to institutional and retail investors, with oversubscriptions of up to $25 million, it said in a statement. Details for the offer will be released next week.

New Zealand's five-year swap rate fell 9 basis points to 2.96 percent, while Contact shares were recently unchanged at $4.78.

Forsyth Barr and Westpac Banking Corp have been appointed joint lead managers and Deutsche Craigs as co-manager.

Last October, Contact chairman Ralph Norris told shareholders the electricity generator and retailer would focus on repaying debt over the next 12-to-18 months, having returned about $847 million to shareholders in the two prior years.

The power company has two tranches of listed debt on the NZX, with $150 million of bonds paying a coupon 4.4 percent maturing in November 2021 and $222 million of notes paying annual interest of 5.8 percent maturing in May 2019. The 2021 notes recently traded at a yield of 4.37 percent and the 2019 bonds were recently at 3.58 percent.

BusinessDesk.co.nz

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