Wednesday 14th March 2012 1 Comment |
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Transpower, the national grid operator, has raised C$250 million in a Canadian private placement, benefiting from lower interest rates than it can sell debt for at home.
The private placement to Canadian institutions is of senior unsecured notes maturing in March 2017 with a coupon of 3 percent. The state-owned enterprise’s $50 million of February 2017 bonds have an effective interest rate of 6.6 percent.
All proceeds of the placement have been swapped back into New Zealand dollars. The funds will be used for general corporate purposes including capital expenditure, it said in a statement today.
In November, chairman Mark Verbiest said Transpower has to raise $3 billion of debt over the next five years in the course of financing a multi-billion dollar upgrade of its national infrastructure. It is planning to lift the amount it charges for transmission by about 20 percent to cover the cost of upgrading its lines to ensure they can cope with increased demands for power.
Last month the company announced it would pay the government a dividend of $110 million for the first-half – more than it declared in profit for the period and the first dividend for seven years, reflecting capital retention over that period to help fund the grid upgrade.
BusinessDesk.co.nz
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