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Z Energy bond offer closes oversubscribed at $135 million

13/08/2012 - General News

Jonathan Hill

Z Energy Limited (‘Z Energy’) closed its retail bond offer on 10 August 2012, having successfully raised $135 million (which includes $35 million in oversubscriptions).

The offer opened on 18 July 2012 with an interest rate of 6.50% p.a. (paid quarterly in arrears) and a maturity date of 15 November 2019. The bonds are senior, secured, fixed rate obligations of Z Energy, and will rank equally with each other and with existing bonds issued by Z Energy.*

This issue represents the Z Energy group’s third successful retail issue in as many years since the New Zealand Superannuation Fund and Infratil acquired Shell’s New Zealand downstream oil and fuel operations in April 2010.** The proceeds of the issue will primarily be used to pay down bank debt.

Z Energy Chief Executive Mike Bennetts today said he was very pleased with the level of ongoing investor support for Z Energy.

“We are delighted to have previous and new investors choosing to continue to support Z Energy. We’re very pleased with the level of investor confidence and support both for Z Energy and the New Zealand market and we are determined to reward that support through building a world-class Kiwi company.” he said.


* The bonds are fully and unconditionally guaranteed by Z Energy, Aotea Energy Limited, Z Energy Holdings Limited, Greenstone Energy Finance Limited, Harbour City Property Investments Limited and Mini Fuels & Oils Limited ("Guarantors").  The guarantee is secured over all assets of the Guarantors, except for certain excluded assets. The Z Energy group's banks and bondholders share the same security over the Guarantors' assets on an equal ranking basis. Both groups rank behind security held by Z Energy’s suppliers over crude oil and refined products (and their proceeds), in each case to the extent that the supplier has not received payment of the purchase price for them.   The security also ranks behind statutorily preferred creditors and (in certain circumstances) other working capital providers.

** The ultimate joint owners of Z Energy, the New Zealand Superannuation Fund and Infratil, do not guarantee the bonds.