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Infratil seeks up to $100 mln in new five-year infrastructure bond

Friday 13th December 2013 1 Comment

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Infratil, which this month bought back $59 million of its shares, wants to raise up to $100 million from a five-year bond, a day after the Reserve Bank signalled interest rates are set to start rising next year at a faster rate than previously flagged.

The Wellington-based infrastructure investor is offering up to $50 million in infrastructure bonds to all New Zealand investors, with the ability to accept oversubscriptions of up to $50 million, paying annual interest of 6.75 percent, and maturing on Nov. 15, 2019, it said.

In a letter to investors, chairman Mark Tume said the proceeds will be used for general corporate proceeds.

The offer will open on or around Dec. 23, and close on Feb. 14. ANZ New Zealand, Deutsche Craigs, Forsyth Barr, First NZ Capital and Westpac Institutional Bank will manage the offer.

The bond offer comes a day after central bank governor Graeme Wheeler hardened his guidance for higher interest rates next year, saying the bank's forecasts suggest the key rate will rise 2.25 percentage points over two-and-a-quarter years.

The five-year swap rate, the fixed cost to receive a floating rate, was recently at 4.6 percent, having increased from 3.06 percent at the start of the year as the prospect of rising rates

The shares were unchanged at $2.28 today.

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Comments from our readers

On 13 December 2013 at 8:55 pm beegee said:
Makes no sense to me , unless you are the broker advising infratil and clipping the ticket, TWICE, If they can afford to buy back shares, then they shouldn't need money so soon. Looks to me like an exercise in shifting risk from shareholders to bondholders, without a commensurate adjustment to the return
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