Contact Energy sets minimum 8% coupon on sale of 2042 bonds

Wednesday 23rd November 2011 2 Comments

Contact Energy said the coupon on its 2042 bonds will be a minimum 8 percent, at least matching the rate on its existing 2014 bonds traded on the NZDX market.

The offer of $150 million plus oversubscriptions of $25 million have been reserved for clients of participants in the bookbuild process who have received firm allocations, Contact said. It also plans a public pool on a first in, first served basis, bringing the total that could be sold to $250 million.

Contact has the right to reset the interest rate and redeem the bonds on Feb. 15, 2017, at a ‘step-up margin’, which is the margin plus an annual step-up percentage of 0.25 percent.

The bonds have a face value of $1. The initial interest rate will be set on Dec. 16 and will be the higher of the minimum 8 percent rate and the 4.55 percent margin over the benchmark rate.

The Wellington-based electricity generator said the unsecured bonds, which will trade on the NZDX market, would “further optimise its capital structure through increasing financial flexibility and extending its term funding profile.”

Contact has $550 million of bonds listed on the NZX’s debt market, paying 8 percent interest per annum.

The company said interested investors can register with Craigs Investment Partners, ANZ, ASB Institutional, Forsyth Barr, Westpac Institutional Bank and financial advisers.

Craigs is the arranger and joint lead manager with ANZ, ASB and Forsyth Barr. Westpac Institutional is co-manager.

BusinessDesk.co.nz

Comments from our readers

On 27 November 2011 at 10:03 pm david macpherson said:

would like to read views on this issue

On 5 December 2011 at 1:46 pm gary said:

a safer bet than eurozone bonds