Meridian seeks up to $150m in retail bond offer
The bonds will carry an annual interest rate of about 4.75-4.85% using the seven-year swap rate.
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Meridian Energy wants to raise $150 million through a new listed bond to refinance an upcoming debt maturity and cover general business costs.
The country's biggest electricity generator is offering up to $100 million of unsecured, unsubordinated fixed rate bonds with oversubscriptions of up to $50 million, Wellington-based Meridian said in a statement. The bonds will mature on March 20, 2024, and have an indicative margin of 1.5-1.6%, implying an annual interest rate of 4.75-4.85% using the seven-year swap rate.
The funds will go toward repaying a $75 million seven-year bond with a coupon of 7.55% that matures this month and other "general corporate purposes."
Meridian flagged plans to tap the debt market for funds when it reported a 6% increase in first-half operating earnings last month. Like other electricity generator-retailers, the company's capital investment programme is relatively light due to flat energy demand, and Meridian plans to spend $41 million over the next seven years refurbishing three Ohau hydro stations.
Companies have flocked back to the NZX debt market as low interest rates become an attractive funding option, and the stock market operator today said the number of listed debt securities rose 24% to 109 in February from the same month a year earlier.
Meridian had net debt of $1.19 billion as at December 31, up $54 million from a year earlier. Of that, $80 million is scheduled to mature this year, and the next capital market maturity is in April 2019 when $271 million of bonds in the US private placement market come due.
The current offer closes on March 10 after a bookbuild process sets the final interest rate, and the debt will list 10 days after that. There is no public pool for the offer, which has been reserved for customers of joint lead managers Bank of New Zealand and Westpac Banking Corp, co-manager Deutsche Craigs and NZX participants.
Meridian shares slipped 0.2% to $2.73, and have gained 14% over the past 12 months.
(BusinessDesk)
Paul McBeth
Mon, 06 Mar 2017
Mon, 06 Mar 2017
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Meridian seeks up to $150m in retail bond offer
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