Infratil launches $50m five-year bonds with 8% coupon

Infrastructure investor Infratil has launched a new issue of up to $50 million of unsecured unsubordinated infrastructure bonds maturing November 2017 with an 8% annual coupon.

Monday, November 7th 2011, 12:10PM

by Jenny Ruth

Infratil is also offering holders of the $20 million of bonds maturing on November 2011 the opportunity to swap some or all their holdings for the new bonds or otherwise receive their money back in cash.

The maturing bonds, one of eight Infratil bond issues listed on NZX, had a coupon of 8.5% but they last traded on the stock exchange in August at 6.8%.

The proceeds of the new issue will be used to redeem the maturing bonds, if necessary, and to provide the company with longer-term funding than is available from banks, says chairman David Newman.

"While bonds tend to be more expensive than bank borrowing, they allow repayment to be spread over a longer term, reducing the obligation in any one year," Newman says.

"Paying a little more for longer term funding is consistent with Infratil's approach to avoiding and mitigating risks."

Infratil owns NZ Bus, 50% of petrol station owner Z Energy, two-thirds of Wellington Airport and 50.4% of electrictity generator and retailer TrustPower as well as energy investments in Australia.

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