Z Energy says it is considering another bond issue on top of its existing NZ$150 million offer amid strong demand for the seven-year issue targeted at retail investors.
The company, owned by Infratil and the New Zealand Superannuation Fund, says "overwhelming demand" in a domestic bond market facing a dearth of new issues is behind its consideration of another issue.
See the release from Z Energy below:
Z Energy Limited (“Z Energy”) today said that, due to overwhelming demand for its current retail bond issue, the company was considering an additional bond issue.
On 8 July 2011, Z Energy announced to the market that demand for its retail bonds, which have an interest rate of 7.25% p.a. and mature on 15 August 2018, had been exceptionally strong and oversubscriptions of NZ$50 million were to be accepted, taking the issue size to NZ$150 million.
Z Energy Chief Executive Mike Bennetts said that even at NZ$150 million, a number of investors were going to miss out, prompting the company to look closely at the possibility of opening an additional offer to reinforce Z Energy’s commitment to investors and the domestic capital markets.
“We’ve been very pleased with the strong support for our company from New Zealand investors and with the very strong demand for our bonds. Based on the clear appetite from retail investors to invest further in Z Energy, we are discussing the possibility of opening another bond offer to satisfy this demand.”
Mike Bennetts said while no decision had been made, the company was discussing the possibility of issuing a new bond maturing September 2019. He said Z Energy would make a decision over the coming week.
“On the back of the current successful issue, another bond issue would further retire bank debt, increase funding flexibility and extend the average maturity of its existing debt portfolio."