What is it called and what sort of savings product is it?
Works Infrastructure Finance has launched an offer of preference shares to raise up to $200 million.
Who is the company behind it?
Works Infrastructure is a wholly-owned subsidiary of ASX-listed Downer Edi. Downer providesengineering and infrastructure management services to the public and private transport, energy, communications and resources sectors in New Zealand, Australia, Asia-Pacific and the UK. It has a market capitalisation of A$2.2 billion (NZ$2.5 billion) and a BBB-rating from Fitch.
Who is the target market?
This appeals to people who want a high-yielding listed debt security.
What return does it offer?
The shares will pay a minimum fixed gross dividend of 9.5 per cent annually.
When will it be launched?
Tomorrow.
What other products is it like or is it competing with?
It is in the competitive fixed income asset category and is up, primarily, against other listed debt offerings.
Is it long term, short term or medium term?
It has a fixed term ending on June 15, 2012.
What is the unique selling point?
The securities, known in the marketplace as ROADS, an acronym for Redeemable Optionally Adjustable Distributing Securities, are guaranteed by Downer Edi on an unsecured subordinated basis.
How strong a stomach do you need for it?
With an interest rate of 9.5 per cent and a BBB-Fitch rating this offer falls into the high-medium risk category.
What's the hitch?
Downer provides a limited unsecured and subordinated guarantee inrespect of the ROADS. Adding to the risk is the fact that these securities are unsecured and subordinated. That means in the event of a failure the likelihood of recovery is low.
