Christchurch International Airport has borrowed $50 million through a fixed rate, eight-year bond issue that'll pay investors interest of 6.25% per annum.
The bonds were priced at a margin of 147.5 basis points over the swap rate, which according to lead manager Westpac is the tightest priced domestic retail "BBB" rated medium term note issue since the global financial crisis. Westpac also said it was the the first "BBB" rated domestic retail bond to price without brokerage.
The offer had sought a minimum of $50 million plus a potential further $25 million in over subscriptions. Westpac said additional volume had been available, but Christchurch Airport had decided to price a lower volume deal with tighter pricing.
Some 25 investors participated in the deal.
Investors had been promised a minimum interest rate of 6.25%, or the eight-year swap rate plus a margin of 1.45%, whichever was greater.
Christchurch Airport, which is 75% owned by Christchurch City Council, has said the money raised will be used to refinance existing debt and to 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.
This article was first published in our email for paid subscribers. See here for more details and to subscribe.
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.