Infratil reopens $100M bond offer after Opposition power policy raises regulatory risk

Infratil, the Wellington-based investor, has re-launched its sale of up to $100 million of June 2022 infrastructure bonds after tweaking its offer document to note the increased regulatory risk posed by the Labour and Green parties’ plans to overhaul the energy market.

The firm suspended its offer last Wednesday to allow a re-write of its investment statement and prospectus after the Opposition political parties flagged an intention to introduce a central buying agency if they win the Treasury benches next year.

“The 18 April announcements increase regulatory uncertainty for TrustPower by raising the possibility that a future government may materially change the structure of the New Zealand electricity industry,” Infratil said in its investment statement.

Because the outcome of the election is unclear and how a new regulatory structure would be implemented, “it is not possible to reliably quantify the impact of the proposals if implemented on TrustPower’s value or financial performance.”

Infratil, which owns 50.7 percent of TrustPower, is seeking $25 million in an unsecured, unsubordinated bond offer open to all investors and will take up to $75 million in oversubscriptions. The firm plans to use the funds raised for general corporate purposes.

The notes will pay annual interest of 6.85 percent, a lower coupon than the 8 percent and 8.5 percent rates offered in its existing listed bonds.

Shares in Infratil closed at $2.30 on Friday and have shed 3.6 percent since the announcement, while TrustPower has dropped 7.1 percent to $7.25.