University of Canterbury says bond payments won’t be impacted by quake writedown

By Jason Krupp

Feb. 17 (BusinessDesk) - The University of Canterbury's ability to make interest payments on its NZDX-listed bonds won’t be hampered by a $25 million writedown on the value of property damaged in the Sept. 4 earthquake.

The Christchurch-based university said the writedown, required under current accounting rules, represents 5% of the total $529 million value of its buildings.

It has $50 million in five-year bonds repayable in December 2014. The bonds, which carry a coupon of 7.25%, were last traded at $103.01, for a yield of 6.75%, according to NZX data.

The university is financially well positioned to make interest payments, with annual revenue approaching $300 million, net assets in excess of $700 million and over $100 million in working capital.

"The university expects that its extensive insurance coverage will ensure that no material negative financial impact will occur," it said in a statement.

The full financial impact of the earthquake is still being assessed as additional damage to facilities and equipment is discovered during the repair process. Initial estimates put the impact anywhere between $15 million to $58 million.

(BusinessDesk)

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