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Friday 3rd April 2009 |
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The May 2014 bonds, which have a BBB credit rating at Standard & Poor's, will trade on the NZX debt market.
"The strength of the demand for the offer is a good indication of ongoing support for Contact's business and its strategic initiatives," chief executive David Baldwin said in a statement.
The funds will be used to repay debt and invest in new generation, including a geothermal plant near Taupo, gas-fired peaking capacity at Stratford and the nation's first underground gas storage facility.
Companies are finding hot demand for debt securities because deposit rates have dwindled as the central bank cut interest rates, reducing the income for people dependent on their investment income. ANZ Bank offers 3.5% for $5,000 on term deposit over three years.
Contact said its bond sale was 83.3% oversubscribed.
Shares of Contact rose 1.2% to $5.87 today and have dropped 24% this year. The utility posted a 79% slump in first-half profit, saying constraints on the national grid stymied its efforts to respond to climatic challenges.
Companies including Tower, Fonterra and Auckland International Airport have tapped investors demand for fixed-rate securities this year.
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