Christchurch International Airport (CIAL) is seeking to borrow up to $75 million through an issue of unsecured, subordinated bonds.
CIAL has announced an eight-year retail bond offer of up to $50 million bonds, with a potential further $25 million in oversubscriptions.
Investors will receive a minimum interest rate of 6.25% per annum, or the eight-year swap rate plus a margin of 1.45%, whichever is greater. The actual interest rate will be set on Friday September 27. An estimation of the current eight-year swap rate is 4.85%.
The minimum subscription is for $5,000 and in multiples of $1,000 thereafter.
CIAL says the money raised will be used to refinance existing debt and provide for future capital development and general operational purposes.
The issue carries a Standard & Poor's credit rating of BBB+. See credit ratings explained here.
CIAL's previous issue of seven-year bonds in December 2012 originally carried a S&P rating of A- but have been subsequently downgraded to BBB+.
Neither Christchurch City Council, which owns 75% of CIAL, nor CIAL itself, guarantee the bonds. Westpac is the offer's arranger and lead manager.
These bonds are only available within New Zealand and won't be listed on the NZX.
Summary of the key details:
| Issuer | Christchurch International Airport Ltd - (CIAL) |
| Issue size | $50 mln with over subscriptions of $25 mln |
| Term | 8 years |
| Credit Rating | S&P BBB+ |
| Opening Date | 23 September 2013 |
| Closing and rate set Date | 27 September 2013 |
| Maturity | 4 October 2021 |
| Interest rate | The higher of 6.25% or 8-year swap rate plus margin of 1.45% |
| Interest payments | Semi-annually on 4 April and 4 October each year |
No chart with that title exists.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.