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Mighty River Power lengthens book with $100 million bond issue

Thursday 11th February 2010

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Government-owned electricity company Mighty River Power Ltd settled a $100m wholesale bond issue today, tapping current market appetite for longer dated, high quality debt issuers.

Carrying a Standard & Poor's BBB+ credit rating, the issue will be used for general corporate purposes, including paying down existing shorter-term facilities.   

"The bond lengthens the company’s debt maturity profile, which is appropriate for an infrastructure business," the company said in a statement ahead of its first-half report, due by month's end under a new, more rigorous reporting regime for SOE's.  There is also intense ministerial scrutiny of commercial performance and moves to create a quasi-listed equities continuous disclosure regime for SOEs. 

ANZ was the sole lead manager on the MRP bond issue, which attracted nine investors.  The issue was split between seven and ten-year maturities, with a yield of 7.50% for the seven-year issue and 8.21% for the ten-year issue.

The issue tapped an existing NZ$50m seven-year issue that Mighty River Power transacted last year.  

"The deal was driven by specific investor demand for longer maturities," the company said. 

ANZ Head of Debt Capital Markets Dean Spicer said the issue is the largest ‘BBB’ bond issue ANZ is aware of that has "not been completed under retail documents".

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