Heavy Demand For Mighty River Power Bonds

Heavy Demand For Mighty River Power Bonds

Mighty River Power’s $200 million fixed rate bond issue closed on Wednesday (May 7) with the offer heavily oversubscribed.

Chief Executive Doug Heffernan said the offer was around two times oversubscribed and allotments would be made on May 9. Mr Heffernan said that the Company was delighted with the very strong support received for the issue, particularly as this was the first bond issue by the Company. It has meant that for the first time New Zealanders can have a direct financial interest in Mighty River Power.

“Feedback from the market has indicated there is strong interest in long-term BBB rated bonds and that the demand reflects the strength of the company’s balance sheet and confidence in Mighty River Power’s operating performance.

“Institutional and broker support was very high with around 70% placed with retail investors. Particular interest was shown by the customers of Mercury Energy, the retail arm of Mighty River Power. The overall level of support indicates that investors were attracted to a bond issue offering competitive rates,” says Mr Heffernan.

The $200 million bond offer is unsubordinated, unsecured over 10 years with an early repayment option by the Company to repay the bonds after five years. The interest rate on the bonds was set at 7.01% for the first five years.

The proceeds from the issue will be used principally to repay short-term debt. As a result the company’s debt maturity profile will be lengthened and will be better aligned with the long-term nature of its operating assets.

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