New Zealand telco Spark (NZE:SPK) has launched a seven-year NZ$100m (US$65.5m) fixed rate bond offering in its second trip to the debt market in recent months.
New Zealand telco Spark (NZE:SPK) has launched a seven-year NZ$100m (US$65.5m) fixed rate bond offering.
Subsidiary Spark Finance will offer the unsecured, unsubordinated bonds to institutional and local retail investors, with oversubscriptions of up to NZ$50m (US$32.8m), the Auckland-based telco said in a statement.
The indicative margin for the bonds, due 10 March 2023, is 1 to 1.5% per annum. The final interest rate will be set after the bookbuilding process closes on 4 December and announced via the New Zealand stock exchange (NZX).
The bonds are expected to be issued on 10 December and quoted on the NZX Debt Market. Spark expect Standard & Poor’s to rate them A- in line with its long-term credit rating for the company.
The entire offering is reserved for clients of joint lead managers, ANZ and Commonwealth Bank and co-manager Deutsche Craigs alongside NZX participants and other financial intermediaries.
Russell McVeagh provided legal advice to Spark on the offering.
Proceeds will be used for general corporate purposes.
The bonds will rank equally with Spark Finance’s other unsecured and unsubordinated debt.
This is the second time Spark, which reported total debt of NZ$692m (US$455.7m) for FY 2015, has tapped debt markets in recent months: in September, it agreed a NZ$100m revolving credit facility with Westpac maturing in November 2016.
Spark, formerly Telecom New Zealand, embarked on a new strategy in 2013 which has seen it divest Australian subsidiary AAPT, its 60% stake in Telecom Cook Islands and its international voice and leasing business.
The operator has been repositioning itself around its domestic digital services: Spark Home, Mobile & Business (formerly Telecom Retail), Spark Digital (formerly Gen-i), Spark Ventures (formerly Digital Ventures), and Spark Network (formerly Telecom Connect).