The Warehouse confirms issue of up to $125m bonds to replace maturing $100m issue paying 7.37%

The Warehouse is looking to borrow up to $125 million through an issue of  five-year unsecured, unsubordinated, fixed rate bonds that it expects will pay investors an annual interest rate of between 5.30% and 5.55%.

The issue will refinance a $100 million issue of senior bonds that’s paying investors 7.37% and matures on June 15, and also be used for “general corporate purposes.”

The new offer consists of a general offer of up to $75 million that’s open to institutional investors and the New Zealand public, and an exchange offer of up to $25 million that’s open to holders of the maturing bonds. On top of this The Warehouse may accept oversubscriptions across the two offers at its discretion to bring the total sum borrowed up to $125 million.

“The Bonds are unsecured unsubordinated bonds that rank equally with The Warehouse’s existing bank facilities. Interest on the bonds will be paid semi-annually in arrears, with the first interest payment to be made on 15 December 2015,” The Warehouse says.

The interest rate the bonds will pay will be set though a bookbuild process on Tuesday May 19, and announced via NZX. The indicative interest rate range is 5.30% to 5.55% per annum.

The offer is expected to open on 20 May 2015. 

Joint lead managers are Deutsche Craigs, ANZ and BNZ.

The diagram below is taken from The Warehouse’s product disclosure statement.