Christchurch City Holdings Ltd (CCHL), the investment arm of the city council, plans to sell as much as $150 million of five-year bonds, using the money to pay special dividends that will contribute to the city's infrastructure investment.
It marks the first 'retail' bond offered by the investment company which oversees eight businesses for the council including Christchurch International Airport, Orion New Zealand, Lyttelton Port Co, and Red Bus. Group assets are about $3.6 billion.
The bonds will mature on December 6, 2022. The interest rate will be determined during a bookbuild. The offer opens on November 27 and closes on November 29. They are expected to be quoted on the NZDX market on December 7. They are expected to be rated A+ by Standard & Poor's.
In 2016, the council signed off on a "capital release programme" that will see the holding company return a total of $280 million over two years to support post-earthquake infrastructure investment. It paid a $70m special dividend in 2017. To make the payments, CCHL established a debt funding programme.
Of the new bond, $140m would be paid to the council in the 2018 financial year, with any balance used to refinance CCHL's short-term debt, it said.