Auckland Airport cuts fine deal in US$250M bond issue
By Paul McBeth
Jul. 25 (BusinessDesk) - Auckland International Airport has sold US$250 million of bonds in the final tranche of a financing package to pay for its capital return to shareholders earlier this year at what it says is the lowest borrowing margin for a facility of its kind for a decade.
The country's major gateway sold the debt on the US Private Placement market, a private bond market, in a single 12-year tranche paying annual interest of 3.61 percent, it said in a statement. The proceeds will repay a $130 million bridging loan it took on to help fund its capital return and an upcoming $125 million bond maturity in November. The funds have been swapped back into New Zealand dollars, and provide the airport funding at the New Zealand three-month bank bill rate, currently at 3.71 percent, plus 1.255 percent.
"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," chief financial officer Simon Robertson said. "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."
The deal is the third and final debt transaction the airport will make to refinance the $454 million capital return it made to shareholders in April, when it cancelled one-in-10 shares at $3.43 apiece.
The shares were last at $3.81, and have gained 6.6 percent this year.