Council to issue up to $200 mill in bonds
The Bay of Plenty Regional Council is seeking to raise up to $200 million through a perpetual preference share offer to fund infrastructure projects.
Monday, February 4th 2008, 9:21PM
Proceeds would be used to establish a fund to invest in priority infrastructure projects for the benefit of the Bay of Plenty region, the council, known as Environment Bay of Plenty, said.
Quayside held a 55% shareholding in Port of Tauranga, as well as property investments and an international and local equity portfolio.
Dividends on the perpetual preference shares were expected to be funded from dividends paid by the port and returns from Quayside's other investments, the council said.
Holders would have an option to put the shares back to the council in certain circumstances, including the failure of Quayside to pay a dividend, providing additional protection for investors.
"We see this transaction as a milestone for both the council and Quayside as it enables us to raise funds without Port of Tauranga shares having to be sold," Environment Bay of Plenty chairman John Cronin said.
It was intended that the shares pay imputed dividends based on a fixed margin over the three year swap rate.
The offer is scheduled to open on February 12 and close on March 7. The fixed margin over the three year swap rate and a minimum initial dividend rate will be set on February 11, following a book-build process.
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