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Infrastucture group Downer announces NZ$150 mln retail bond offer
Infrastructure company Downer EDI Limited announced a NZ$100 million retail bond issue on Wednesday with the ability to accept NZ$50 million in oversubscriptions. The bonds, called 'Works Bonds', are three year, fixed rate, unsubordinated, unsecured debt securities that will expire on September 15, 2012.
The bonds will offer a fixed quarterly interest payment, with the interest rate to be determined on June 25. The bonds are expected to start trading on July 1.
"The proceeds of the Offer will be used to repay existing debt on maturity and for other general corporate purposes of the Downer Group," Downer said.
"Downer, which carries an investment grade Issuer Default Rating of BBB- (stable outlook) from Fitch Ratings, guarantees Works Bonds on an unsubordinated, unsecured basis, along with other members of the Downer Group who are Guarantors from time to time in accordance with the supplemental trust deed."
UBS, ANZ, Forsyth Barr Limited and Westpac Institutional Bank will be the Joint Lead Managers for the offer and BNZ Capital will be the Co-Manager. UBS has also been appointed as the Structuring Adviser for the offer.
The offer is only being made to New Zealand resident retail and institutional investors.
Downer EDI Limited is listed on the Australian Stock Exchange.
We have contacted Downer to ask how the bonds will be priced.
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We are also going to ask for an interview with the CEO. We are interested in what you would like to know about the bonds and the company in particular.
No worries. Why is it
No worries.
Why is it unsecured.
That about does it for me.
Isn't that rating worse than
Isn't that rating worse than Hanovers was, prior to the freeze. Is it even investment grade?
> other general corporate purposes
>
other general corporate purposes of the Downer Group," Downer said.
<
I dont like this bit. All it appears to do is let them off the hook with bank security,I take it the banks have security, swap some for unsecured. Not for me.
what is the rate. Is
what is the rate. Is there a secondary market. Would have to be over 10% given their BBB- Junk bond rating.
“Downer, which carries an investment
"Downer, which carries an investment grade Issuer Default Rating of BBB- (stable outlook) from Fitch Ratings, guarantees Works Bonds on an unsubordinated, unsecured basis, along with other members of the Downer Group who are Guarantors from time to time in accordance with the supplemental trust deed."
Sounds very simalar to First Secured Debenture of the finance company variety.
UBS, ANZ, Forsyth Barr Limited and Westpac Institutional Bank will be the Joint Lead Managers for the offer and BNZ Capital will be the Co-Manager. UBS has also been appointed as the Structuring Adviser for the offer.
Bonds, bonds and more bonds. Govt Bonds, Local Govt Bond Bank check this great site out explaining just what they are all about. The area of bond issuance surrounding underwriters and lead managers is very interesting, these are normally central banking entities that can use created credit to buy in to ensure an issue takes place. They then get to hold themselves or sell into the secondary market. For this they charge a fee to compensate for risk, but if you get to buy in for nothing I ask you intelligent folks to tell me where the risk is when your entry fee cost you nothing?
http://www.publicbonds.org/major_players/underbasics.htm
http://glossary.reuters.com/index.php?title=Lead_Manager