Ausnet Services Holdings Pty Limited (“Ausnet”)
Ausnet Gas Services Pty Ltd, Ausnet Electricity Services Pty Ltd, Ausnet Transmission Group Pty Ltd, Ausnet Asset Services Pty Ltd, Ausnet Finance Pty Ltd
Debt Issuance Programmes dated 30 January 2012 and 25 January 2013
Dated 26 June 2012 and 13 February 2013
Nature of the Bonds
Direct, unconditional,unsubordinated and unsecured obligations of the Issuer and will rank equally among themselves and at least equally with all other unsubordinated and unsecured obligations of the Issuer, except for liabilities mandatorily preferred by law.
A$305,000,000 (in 2 tranches of A$175,000,000 and A$130,000,000)
If Ausnet’s credit rating falls below a certain level, the interest rate will Step-up in increments, to a maximum of 2% above the Interest Rate. If Ausnet’s credit rating subsequently rises, then the Interest Rate will Step-down in increments, however at no time will the Interest Rate be less than 5.75% per annum.
Step-Up / Step-Down
Repayment at Par on the Maturity Date
On the Maturity Date, bondholders are scheduled to receive the Face Value and the final Coupon Payment for the last Interest Period.
The value of an investment in Ausnet Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Ausnet’s financial performance. The following risks may also affect an investment in Ausnet Bonds:
- Lack of liquidity - in the secondary market for Ausnet Bonds;
- Interest rate risks – bondholders may suffer unforeseen losses due to fluctuations in interest rates;
- Regulatory risks - The energy industry in Australia is highly regulated, which can limit AusNet’s flexibility and may adversely affect its financial performance
- Litigation risks - Risks relating to litigation and regulatory actions;
- Operational risks - Network failures, equipment breakdowns, planned or unplanned outages, bushfires and other natural disasters may cause losses to or harm the AusNet’s business and reputation
- Default risk - if an event of default occurs under the Bonds, or Ausnet fails to perform any obligation in relation to the Bonds, such event or failure may impact on the value of an investment in the Bonds, the transferability of the Bonds and the ability of a holder to recover amounts due under the Bonds. In assessing potential default risk, a bondholder should consider the periodic and continuous disclosures made by the Issuer.
Key benefits include:
- interest paid semi-annually in arrears;
- interest paid as 100% cash;
- interest is not deferrable nor are interest payments discretionary;
- rank equally with all other senior and unsecured creditors of the Issuer.
The Issuer and the Guarantors agree not to create any Lien or allow one to exist on the whole or any part of its present or future property to secure any Capital Markets
Indebtedness or any guarantee (or other assurance against financial loss) in respect of any Capital Markets Indebtedness without the approval of an Extraordinary Resolution of Holders unless, before or at the same time, the Issuer’s obligations under the MTNs either:
(a)are secured equally and ratably; or
(b) have the benefit of any other Lien approved by an Extraordinary Resolution of Holders
Early Redemption by Issuer
- Yes, for tax reasons
- The Issuer can redeem (“call”) the bonds early, where there has been a change of control or proposed change of control event that otherwise constitutes an event of default or breach of the conditions of the Bonds.
Events of Default
Events of Default include:
- Failure to Pay: Applicable with a 3 day cure period for non-payment of Principal and a 5 day cure period for non-payment of Interest;
- Breach of other obligations: Applicable, with a 30 day cure period;
- Insolvency: Applicable;
- Cross default: Applicable with Threshold Amount of A$ 30,000,000;
- Enforcement: Applicable with Threshold Amount of A$20,000,000;
- Unenforceability: Applicable, with a 30 day cure period.