Genesis Energy bond holders elect to sell 28 percent of bonds getting lower interest rate

Genesis Energy bond investors have opted to sell 27.7 percent, or about $77.8 million, of the state-owned power company’s hybrid bonds rather than accept a lower interest rate.

The company flagged in May that it would modify the bonds and trim the issue by about $75 million to $200 million after Standard & Poor’s changed its criteria for assessing the equity content of such instruments, to intermediate equity content from high.

The change in status gave Genesis the right to redeem the NZDX-listed July 15, 2041, bonds and replace it with a new issue of intermediate equity content bonds though it instead opted to modify the existing issue so it more closely resembles intermediate equity debt.

On July 10, Genesis announced that the interest rate would be reset to 6.19 percent, effective today when a trading halt was lifted, from 8.5 percent

Genesis, one of the state-owned power companies slated for sale, said the first reset date and call date of the bonds has been extended to July 15, 2018, from July 2016.

Of the 76.2 million bonds purchases, some 1.19 million were re-sold to other investors, the company said. Following the transactions, the company has 200million bonds outstanding, excluding 75 million held as capital stock.

The bonds were last quoted on the NZDX market at $1.012 per $1 face amount.

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