Genesis Energy to raise up to $100m in six-year bonds

The Auckland-based electricity generator-retailer will sell $75 million of debt.

Genesis Energy [NZX: GNE] is looking to raise up to $100 million in six-year bonds at well below the cost it's been paying on a note that matures next week.

The Auckland-based electricity generator-retailer will sell $75 million of debt to institutional and retail investors, with subscriptions of up to $25 million, it said in a statement. The indicative margin is to set the interest rate 1.45-to-1.6% above the swap rate, which is currently at 2.8%, implying a coupon of between 4.25% and 4.4%.

That's less than the 7.65% annual interest rate Genesis has been paying on $105 million of NZX-listed debt set to mature on March 15.

Genesis says it will use the proceeds for general corporate purposes.

Record low swap rates have lured companies back to the debt market to raise funds, with Genesis joining the likes of rival Meridian Energy, Spark New Zealand, Auckland International Airport, and Fonterra Cooperative Group selling new bonds.

Genesis raised its interim dividend payment less than expected when reporting flat first-half earnings last month as falling methanol and oil prices weigh on the company's outlook.

The shares were unchanged at $2.01, and have gained 4.2% so far this year.


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