The first of rumoured domestic corporate bond offers has emerged from the pipeline, with Air New Zealand confirming it is looking to raise as much as $150 million through an offer in the next month.
The first of rumoured domestic corporate bond offers has emerged from the pipeline, with Air New Zealand confirming it is looking to raise as much as $150 million through an offer in the next month.
Air New Zealand has informed the NZX it will offer the unsecured, unsubordinated, fixed-rate bonds as early as September 5 – the airline’s first corporate bond issue since 1991.
The bonds will mature on November 15, 2016 and the interest rate is yet to be set in consultation with joint lead managers First NZ Capital Securities and Craigs Investment Partners. Money raised would be used for general business purposes, the airline said.
Air New Zealand – almost 75% government-owned - has been testing the investor appetite for a bond issue in recent months after buying a 15% stake in Australian no-frills airline Virgin Blue for $A145 million earlier this year.
New Zealand’s domestic corporate bond market has not had a lot of action in recent years, but a number of offers have been rumoured with Meridian, Auckland International Airport, WaterCare and Mainfreight among those aired in market chatter.
Owner and director of advisory firm Asia Pacific Risk Management, Roger Kerr, says the rumoured pipeline of corporate bond issues would do well to come to market in this climate, where quality, fixed-interest investments were in short supply.
Investors appetites were proven by recent corporate bond issues for Genesis Energy and ‘Z’ Energy (which closed last week oversubscribed) “snapped up quick”, he said.
