Powerco to issue guaranteed bonds

Monday 23rd February 2004

Electricity and gas distribution company Powerco, is offering a series of fixed-term, fixed rate, unsecured, guaranteed bonds of $200 million with over-subscriptions of up to a further $50 million.

The offer opens to New Zealand resident investors on March 5. The scheduled payments by Powerco of interest and principal on the bonds will be guaranteed on an unsecured basis by US-based XL Capital Assurance Inc, a specialist financial guaranty organisation.

The guaranteed bonds have been assigned a proposed rating of AAA by Standard & Poor's and offer investors a choice of three tranches: 7-year, 9-year and 11 ¼ -year with the minimum investment amount for each tranche being $5,000 with multiples of $1,000 thereafter. The guaranteed bonds will have a minimum interest rate set on March 4, and the final interest rate will be determined by Powerco on the offer closing date on 25 March, 2004.

The funds raised from the issue of the guaranteed bonds will be used to refinance a portion of the existing bank funding that was borrowed to finance the purchase of gas and electricity assets from UnitedNetworks Limited in November 2002.

"This guaranteed bond issue will extend Powerco's maturity profile to the medium-term and will enable Powerco to manage its refinancing risk at levels which are consistent with those approved by Powerco's Board," Powerco chairman Barry Upson said. Application has been made to the NZX for permission to list the bonds, and all the requirements of the NZX relating thereto that can be complied with on or before the date of this media release have been duly complied with.

Powerco has approximately 400,000 electricity and gas consumer connections in the North Island and a growing presence in Australia with an energy services contracting business based in South East Queensland and the construction of the first natural gas distribution network in Tasmania.

Comments from our readers

No comments yet