1 mins to read

Chorus gets $1.35b debt funding

Company says strong domestic and foreign demand saw it secure a third more debt funding that it originally anticipated.

NBR staff
Wed, 30 Nov 2011

Chorus has secured a $1.35 billion syndicated bank facility as part of its demerger from Telecom, the company has told the NZX.

Chorus CFO Andrew Carroll said the long-term funding in line with the funding requirements set out in the demerger Scheme Book.

“We initially sought $1 billion in bank financing and extended the bank facility to $1.35 billion following strong demand from domestic and foreign financial institutions. This means we can get on with building our fibre network with even greater funding certainty,” Mr Carroll said.

The syndicated bank facility comprises two equal tranches of $675 million over three and five years. Citibank N.A. acted as debt advisor to Chorus for the syndicated bank facility. Citibank N.A., ANZ National Bank and Westpac acted as joint-lead arrangers and bookrunners. 

As announced previously, £235 million ($490 million) of Chorus EMTN (Euro Medium Term Note] bonds maturing in 2020 are also expected to be issued by Chorus, denominated in pound sterling. 

The combination of bonds and syndicated bank facility means Chorus anticipates making only very limited drawings under the bridge facility which will be refinanced out of working capital.

Key funding for Chorus' Ultrafast Broadband roll out will come through $929 million from the government, in the form of non-voting equity and interest-free debt. If it hits its Crown fibre roll-out targets, Chorus will not have to make its first repayments to the government until 2025.

Chorus inherited $1.7 billion of net interest bearing net debt in the demerger to "new" Telecom's $750-950 million.

The company's shares [NZX:CNU], which debuted on the NZX November 23 at $2.94, closed yesterday down 0.6% to $3.31.

NBR staff
Wed, 30 Nov 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Chorus gets $1.35b debt funding