Investing

Crown Group Finance Ltd

Consumer Services

Crown Group Finance Ltd

Latest price

$ 102.83

  • ASX code
    YTMCWN
  • Maturity date
    18-Jul-2017
  • Capital structure
    Senior Unsecured
  • Coupon type
    FIXED
  • Coupon P.A
    5.75%
  • Issue Date
    18-Jul-2012
  • Next ex. distribution date
    07-Jul-2017
  • Next interest payment date
    18-Jul-2017
  • Payment frequency
    Semi-Annual

Issuer

Crown Group Finance Limited 

Guarantors

Crown Limited, Crown Melbourne Ltd, Burswood Nominees Ltd, Crown Entertainment Group Holdings Pty Ltd, Publishing and Broadcasting (Finance) Ltd

Base terms

$2,000,000,000 Australian Debt Issuance Programme dated 14 May 2012

Pricing supplement

Dated 16 July 2012 and subsequently 1 August 2012

Nature of the bonds

The Bonds will constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer which rank pari passu among themselves. The Bonds will at all times rank at least pari passu, in right and priority of payment with all of the Issuer’s other present and future unsecured unsubordinated indebtedness, except indebtedness preferred solely by operation of law.

Interest rate

5.75% per annum, payable semi-annually (in two coupons of 2.875%) in arrears on 18 January and 18 July in each year, including the Maturity Date. However, the coupon may increase if the Issuer suffers a credit ratings downgrade.

Step-Up Coupon

Step-up in Coupon of up to a maximum of 2.5% should the Bonds fall to a certain rating.

Issue Size

A$300,000,000

Bond Denomination

A$10,000

Repayment at the Maturity Date

On the Maturity Date, Bondholders are scheduled to receive the Face Value and the final payment of Interest for the last Interest Period.

Early Redemption by Issuer

In certain circumstances, the Issuer can redeem the Bonds early for tax reasons, or if 10% or less of the Bonds are outstanding.

Early Redemption by Bondholder

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.

Key Risks

The value of an investment in Crown Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Crown’s financial performance. The following risks may also affect an investment in Crown Bonds:

  • Regulatory risk – Crown operates in the gambling industry which is highly regulated in each of the jurisdictions in which Crown participates and Crown requires the approval of the relevant gaming regulators (usually in the form of licences) in order to conduct its business. Crown’s operations, its financial performance and future prospects are dependent on the regulatory framework in which it operates;
  • Liquidity risk – an active secondary market in respect of the Bonds may never be established or may be illiquid and this would adversely affect the value at which an investor could sell the Bonds;
  • Interest rate risk – the value of Fixed Rate Bonds may be adversely affected by movements in market interest rates;
  • Currency risk – Crown’s financial results may be negatively affected by currency exchange rate fluctuations;
  • Litigation risk – Crown may be subject to litigation and legal liabilities in the ordinary course of operations which can have a negative financial impact on Crown;
  • Default risk – if an event of default occurs under the Bonds, or the Issuer 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.

Negative Pledge

The Issuer and each Guarantor must not create any Security Interest on its present or future assets or property to secure any relevant indebtedness or bank indebtedness of the Issuer or such Guarantor other than permitted security, unless at the same time it secures the Bonds equally and rateably with that relevant indebtedness or bank indebtedness.

Events of Default

Events of Default include:

  • Failure to Pay: Applicable, with a cure period of 5 Business Days in the case of interest, and two Business Days in the case of principal;
  • Breach of Other Obligation: Applicable;
  • Cross Default: Applicable, with a Threshold Amount of A$35,000,000
  • Insolvency: Applicable;
  • Administration: Applicable;
  • Cessation of Business: Applicable;
  • Obligations Unenforceable: Applicable;
  • Enforcement or Attachment: Applicable with a Threshold Amount of A$35,000,000 and which is likely to have a Material Adverse Effect on the ability of the Issuer and the Guarantors (taken as a whole) to perform and comply with their payment obligations under the Bonds.

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