Downer Group Finance Pty Limited (Downer)
Downer EDI Limited and certain Australian and New Zealand subsidiaries as set forth in the Information Memorandum dated 6 November 2018
Downer Group Finance Pty Ltd Debt Issuance Programme Information Memorandum dated 6 November 2018
Dated 18 April 2019
Nature of the Bonds
The bonds and guarantee will be direct, unsubordinated and unsecured obligations of the Issuer or guarantor (as the case may be) and will rank at least equally with all of its other unsubordinated and unsecured obligations, except liabilities mandatorily preferred by law.
29 April 2019
29 April 2026
Interest Rate and Interest Payment Dates
3.70% per annum, payable semi-annually (in two coupons of 1.85%) in arrears on 29 April and 29 October in each year, including the Maturity Date. If Downer EDI Limiteds credit rating falls below BB+/Ba1 in an Interest Period, the interest rate for that period will increase to 4.45% per annum. If Downer EDI Limiteds credit rating subsequently rises to BBB-/Baa3 or above, the Interest Rate will revert to 3.70% per annum.
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 the bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect the Issuers financial performance. The following risks may also affect an investment in the bonds:
- 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;
- Structural risk: The Issuer has no material assets or sources of revenue except for claims against, and advances made to it by, other Group companies under intercompany loans and assets or liabilities under certain hedging arrangements;
- Legal risks relating to litigation and regulatory actions;
- 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;
- Early redemption risk: in certain circumstances the bonds may be redeemed early.
Key benefits include:
- Approximately 5.5 years remaining until Maturity Date;
- Interest paid semi-annually in arrears;
- Interest paid is fixed rate;
- 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 will not create or allow to exist a Security Interest over its assets and it will ensure that no member of the Group will create or allow to exist a Security Interest over its assets other than a Permitted Security Interest.
- Service Coverage Ratio for any 12 month period shall not be less than 3.5:1;
- Debt to Capitalisation Ratio (Total Debt: Total Capitalisation) not to be exceed 50%;
- EBIT of the Issuer and Guarantors must be at least 90% of EBIT of the Group;
- Total Tangible Assets of the Issuer and Guarantors must be at least 90% of Total Tangible Assets of the Group.
Early Redemption by Issuer
- Yes, in certain circumstances, for tax reasons, on 15-60 days notice.
- The Issuer can redeem (call) the bonds early. If the call is made more than 60 days before the maturity date, the issuer will pay accrued interest plus the greater of the principal or the present value of remaining scheduled payments of principal and interest discounted by annualised coupon-matched asset swap rate plus 0.50% per annum. If the call is made within 60 days of the maturity date, the issuer will pay the principal plus accrued interest.
Early Redemption by Bondholder
Where Downer EDI Limited becomes controlled by a new entity, and there is a credit rating downgrade below a certain level or the credit rating is withdrawn within 90 days of the change of control, then bondholders may request the bonds to be bought back by the Issuer prior to the Maturity Date.
Events of Default
Events of Default include:
- Failure to pay: Applicable, with a cure period of 5 Business Days;
- Breach of other obligations: Applicable, with a cure period of 30 days;
- Illegality: it is or becomes unlawful for the Issuer or Guarantor to perform any of its obligations under the bond;
- Enforcement or attachment: Applicable, with a Threshold Amount of A$15,000,000;
- Cross default: Applicable, Threshold Amount is A$ 30,000,000
- Insolvency: Applicable in respect of a Guarantor or the Issuer;
- Cessation of business: The Group as a whole ceases to carry on all or a substantial part of its business;
- NZ statutory management: A Relevant Company incorporated in New Zealand is declared at risk pursuant to the New Zealand Corporations (Investigation and Management) Act 1989 (New Zealand), or a statutory manager is appointed or the New Zealand Financial Markets Authority makes a recommendation to the relevant Minister of the Crown (in New Zealand) to the effect that the Relevant Company be made subject to statutory management;
- Unenforceability / invalidity: Applicable.
Coupon Schedule to Maturity
- 29 October 2020
- 29 April 2021
- 29 October 2021
- 29 April 2022
- 29 October 2022
- 29 April 2023
- 29 October 2023
- 29 April 2024
- 29 October 2024
- 29 April 2025
- 29 October 2025
- 29 April 2026 - Maturity Date