Fraser Whineray, chief executive of Mercury. Photo / File
Mercury NZ plans to raise up to $300 million of subordinated capital bonds, which it will use to refinance an equal amount of listed debt currently paying 6.9 per cent interest.
The electricity generator and retailer said it plans to sell the notes to retail and institutional investors and will
release the details next week. It didn't give an indication on the maturity of the debt or an indicative interest rate.
The funds will go towards redeeming its existing $300m of 2044 capital bonds, currently paying annual interest of 6.9 per cent. That was a margin of 2.25 percentage points above the five-year swap rate at the time.
The interest rate on existing notes are scheduled to reset on July 11, but Mercury last month told holders it will redeem the bonds, which last traded at a yield of 3.8 per cent, or $101.408 per $100 face value.
Under the terms of that offer, Mercury could seek new terms and conditions through an election process, but if that failed, the rate would be reset at the five-year swap, plus the margin and a step-up percentage of 0.25 percentage points.
