By Craig Simpson
In an announcement to the NZ Stock Exchange (NZX) this morning, Auckland Airport advised it has successfully priced its 2nd US Private Placement(USPP), borrowing US$250 mln over 12 years.
The USPP funding is the company’s third and final debt capital market transaction undertaken this year to refinance the NZ$454 million capital return to shareholders which was paid on 14 April.
The company will use the borrowings to repay its remaining NZ$130 million bridge loan borrowings and a further NZ$125 million fixed rate bond repayment on 27 November.
The new USPP funding is a single 12 year tranche of US$250 million with a US$ coupon of 3.61%. The loan will be drawn on 25 November 2014.
The entire US$ proceeds have been swapped back to New Zealand dollars, providing 12 year funding at the New Zealand three month bank bill rate plus 1.255%.
This morning the NZ 3-month bank bill rate is 3.68% so this translates to approximately 4.94% per annum for the term of the loan.
Auckland Airport’s chief financial officer, Simon Robertson, said, “This is an outstanding transaction for Auckland Airport. We are thrilled with the pricing and volume achieved, which validates our decision in 2010 to diversify our borrowing sources and seek long term funding via the USPP market. Notably, this transaction has achieved the lowest borrowing margin versus United States Treasuries for a New Zealand company in the USPP market in the last decade.”
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