SkyCity bonds priced at bottom end of interest rate range

Wednesday 2nd September 2015

SkyCity Entertainment Group, the country's only listed casino operator, will sell $125 million of seven year bonds paying annual interest of 4.65 percent, the bottom end of the indicative price range.

The Auckland based company completed a bookbuild for the offer of unsubordinated, unsecured debt today, accepting $25 million of oversubscriptions, it said in a statement. The bonds have been reserved for clients of the participants in the bookbuild, with the offer opening tomorrow and closing on Sept. 22.

SkyCity initially set the indicative interest rate range at between 4.65 percent and 4.9 percent, before narrowing that yesterday to between 4.65 percent to 4.75 percent.

The proceeds will go towards repaying bank debt and other capital management.

As at June 30, SkyCity had drawn down $384 million of its banking facility, and owed $317 million to US noteholders. Some $40 million of US notes mature in March 2017, with a further $100 million the following year.

The company's weighted average debt interest rate was 6.06 percent in financial year 2015, according to its annual results. Of that its bank facilities were at 4.4 percent and USPP notes were at an average 5.31 percent.

The joint lead managers of the offer are Westpac Banking Corp, ANZ Bank New Zealand, Deutsche Craigs and First NZ Capital.

SkyCity's shares fell 2.8 percent to $3.80, joining the selloff on the S&P/NZX 50 index which was down 1.3 percent in afternoon trading.

BusinessDesk.co.nz

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