Infratil won't offer reinvestment option for November 2017 bond holders

The Wellington-based infrastructure and utility investor has 11 exchange-traded bonds with a collective value of $1.08 billion.

Infratil, which is one of the biggest issuers of NZDX-listed debt securities, says it won't offer holders of its November 2017 bonds an option to reinvest because it has ample funds and untapped bank facilities.

The Wellington-based infrastructure and utility investor has 11 exchange-traded bonds with a collective value of $1.08 billion, of which seven mature over the next eight years and one that is a perpetual bond. In the past, Infratil has typically offered holders of maturing bonds the option to roll over some or all of the maturing debt into a new bond issue.

"Infratil often seeks to provide bondholders with a reinvestment option," Infratil treasurer Fiona Cameron says in a letter to holders of the 2017 bonds. "However, at present, we have a substantial level of funds on deposit with our banks and, accordingly, the Infratil board has decided not to make a further bond issue at this stage."

A spokesman wasn't immediately available to comment further. In a market update in August, Infratil said it had net debt of $668 million at July 31, down from $913 million at March 31. The net figure included bank deposits of $465 million. It also had unused bank facilities of about $250 million.

The company said at the time that it had "considerable capital resources" to support initiatives such as separately listed Tilt Renewables construction of a wind farm in Victoria, developments at its Longroad Energy investment in the US, which develops solar and wind farms, a hotel at Wellington International Airport, and the fifth development for Canberra Data Centres.

Its funds have been boosted this year by the $238 million proceeds from selling 20% of Metlifecare and the sale of $143 million of bonds. It also repaid $66 million of debt.

Cameron said Infratil's surplus liquidity will be used in the near-to-medium term on long-term investments. "This may result in the Infratil board deciding to make a further issue of infrastructure bonds," she said.

The NZX's debt market, with a market capitalisation of about $28 billion, is only just over a fifth of the size of its equity market although it has been growing at a faster pace. In September, the total number of listed debt securities rose by 9.4% to 116 while equity securities fell 4.1% to 163. New debt listings amounted to $580 million in September and $2.67 billion in the year to date while there were no new share sales or compliance listings of equities for a total this year of $480 million.

(BusinessDesk)