Infratil, flush with funds, won’t offer reinvestment option

Article – BusinessDesk

Oct. 17 (BusinessDesk) – Infratil, which is one of the biggest issuers of NZDX-listed debt securities, says it won’t offer holders of its November 2017 bonds an option to reinvest because it has ample funds and untapped bank facilities.Infratil, flush with funds, won’t offer reinvestment option for Nov. 2017 bond holders

By Jonathan Underhill

Oct. 17 (BusinessDesk) – Infratil, which is one of the biggest issuers of NZDX-listed debt securities, says it won’t offer holders of its November 2017 bonds an option to reinvest because it has ample funds and untapped bank facilities.

The Wellington-based infrastructure and utility investor has 11 exchange-traded bonds with a collective value of $1.08 billion, of which seven mature over the next eight years and one that is a perpetual bond. In the past, Infratil has typically offered holders of maturing bonds the option to roll over some or all of the maturing debt into a new bond issue.

“Infratil often seeks to provide bondholders with a reinvestment option,” Infratil treasurer Fiona Cameron says in a letter to holders of the 2017 bonds. “However, at present, we have a substantial level of funds on deposit with our banks and, accordingly, the Infratil board has decided not to make a further bond issue at this stage.”

A spokesman wasn’t immediately available to comment further. In a market update in August, Infratil said it had net debt of $668 million at July 31, down from $913 million at March 31. The net figure included bank deposits of $465 million. It also had unused bank facilities of about $250 million.

The company said at the time that it had “considerable capital resources” to support initiatives such as separately listed Tilt Renewables construction of a wind farm in Victoria, developments at its Longroad Energy investment in the US, which develops solar and wind farms, a hotel at Wellington International Airport, and the fifth development for Canberra Data Centres.

Its funds have been boosted this year by the $238 million proceeds from selling 20 percent of Metlifecare and the sale of $143 million of bonds. It also repaid $66 million of debt.

Cameron said Infratil’s surplus liquidity will be used in the near-to-medium term on long-term investments. “This may result in the Infratil board deciding to make a further issue of infrastructure bonds,” she said.

The NZX’s debt market, with a market capitalisation of about $28 billion, is only just over a fifth of the size of its equity market although it has been growing at a faster pace. In September, the total number of listed debt securities rose by 9.4 percent to 116 while equity securities fell 4.1 percent to 163. New debt listings amounted to $580 million in September and $2.67 billion year-to-date, while there were no new share sales or compliance listings of equities for a total this year of $480 million.

(BusinessDesk)

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