Thursday 5th July 2012 1 Comment
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Z Energy, the locally-owned downstream transport fuels supplier, wants to raise as much as $150 million through a retail bond issue to repay debt and general expenses. The company will open the offer on July 18 for $100 million seven-year bonds with the ability to accept oversubscriptions of up to $50 million, and will close on Aug. 10.
The sale comes after two successful offers where Z Energy raised almost $300 million. The fuel retailer is yet to announce the bonds interest rate. "The net proceeds of the bond issue will be on-lent to Aotea Energy Limited to use to repay currently drawn debt on the “revolving core debt” facility, and for the Z Energy Group’s general corporate purposes," the company said in its simplified disclosure prospectus.
Z Energy's $147 million of bonds maturing in 2016 pay an annual interest rate of 7.35 percent, and last traded at a yield of 5.9 percent, indicating a more expensive price than the face value of the notes. Its $150 million of 2018 debt, paying annual interest of 7.25 percent, last traded at a yield of 6.8 percent.
The new bonds are senior, secured, fixed rate obligations of Z Energy, and will rank equally with each other and with existing bonds, the company said in a statement. Interest will be paid quarterly, with the first payment scheduled for Nov 12. The bonds will be listed on the NZX debt market from Aug. 16. Z Energy was formerly the downstream business of Shell New Zealand and is now owned 50/50 by Infratil and the New Zealand Superannuation Fund.
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