Trustpower announces $100m bond offer

$50m available for retail clients.
Trustpower CEO Vince Hawksworth.

NZX-listed energy and broadband company Trustpower has announced the offer of up to $100 million of unsecured, unsubordinated fixed-rate bonds to New Zealand institutional and retail investors.

The bonds have a seven year term with a maturity date of 29 July 2026.

Oversubscriptions of up to $25m may be accepted.

The interest rate will be the higher of (a) the minimum rate of 3.35% a year or (b) the issue margin plus the base rate on July 5.

The issue margin will be set following a bookbuild process on July 5, 2019.

The indicative issue margin range for the bonds is 1.75% to 1.85% a year.

The offer comprises $50m for New Zealand clients of the joint lead managers, approved financial intermediaries and other primary market participants invited to participate in the bookbuild process; and an investor offer of up to $50m for existing New Zealand bondholders and shareholders of Trustpower.

The joint lead managers of the offer are Deutsche Craigs and Forsyth Barr.

Under the investor offer, Trustpower has reserved $30m of bonds for New Zealand holders of Trustpower’s existing subordinated bonds (ticker TPW160) who wish to apply to exchange all or some of their bonds on a one-for-one basis.

Trustpower will also make a cash payment to each investor who is issued bonds under the exchange.

A further $20m of bonds under the investor offer is for all Trustpower shareholders and bondholders in New Zealand.

Trustpower may scale applications in its absolute discretion, and in doing so may take into account factors including timing and size of application.

The investor offer is expected to close on July 19,  2019 and the firm offer is expected to close on July 24,  2019, with the bonds expected to be issued on July 29, 2019.

The bonds are expected to be quoted on the NZX Debt Market.