Incitec Pivot Limited (Incitec)
Incitec Pivot Finance LLC and various Australian, New Zealand, USA and Canada based subsidiaries and related entities.
Medium Term Note Programme Information Memorandums dated 27 February 2019 and 30 July 2013
Dated 18 April 2019
Nature of the Bonds
The Notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer. As among themselves, the Notes of each Series will rank pari passu and will rank at least equally with all other present and future direct, unconditional, unsubordinated and unsecured obligations of the Issuer, except for obligations mandatorily preferred by law.
18 March 2019
18 March 2026
Interest Rate and Interest Payment Dates
4.30% per annum, payable semi-annually (in two coupons of 2.15%) in arrears on 18 March and 18 September in each year, including the Maturity Date.
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 Incitec Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Incitecs financial performance. The following risks may also affect an investment in Incitec Bonds:
- Lack of liquidity - in the secondary market for Incitec Bonds;
- Interest rate risks – Bondholders may suffer unforeseen losses due to fluctuations in interest rates;
- Litigation risks - Risks relating to litigation and regulatory actions;
- Default risk - if an event of default occurs under the Bonds, or Incitec 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;
- Early redemption risk – in certain circumstances the bonds may be redeemed early;
- Unsecured investment - The bonds are unsecured and, in making an investment, an investor is relying on the Issuers general ability to repay principal and pay interest at the time it is due and fulfill its other obligations in connection with the bonds, without recourse to any particular asset or security.
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, and will ensure that each Guarantor will not, unless approved by an Extraordinary Resolution, create or permit to subsist any mortgage, charge, pledge, lien or other form of encumbrance or security interest, other than a Permitted Security Interest (an interest arising in the ordinary course of business), upon the whole or any part of its present or future assets or revenues.
Early Redemption by Issuer
- Yes, for tax reasons
- The Issuer may redeem (call) the bonds early. If the call is made more than 90 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 the 6 month asset swap rate as calculated by ICAP Australia Pty Limited plus 0.45% per annum. If the call is made within 90 days of the maturity date, the issuer will pay the principal plus accrued interest.
- A call may be made under a Clean Up Condition where the aggregate outstanding principal amount of the Notes that have not been redeemed is less than 10% of the aggregate outstanding principal amount of all of the Notes issued.
Early Redemption by Bondholder
Where the Issuer becomes controlled by a new entity, and there is a credit rating downgrade below a certain level or the credit rating is withdrawn, 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 2 Business Day cure period;
- Breach of other obligations: Applicable, with a 15 Business Day cure period;
- Insolvency: Applicable;
- Cross default: Applicable with Threshold Amount of A$ 25,000,000;
- Enforcement: Applicable with a 30 day cure period;
- Security enforced: Applicable where an encumbrance against all or the major part of the Issuer or Guarantors property is enforced;
- Unenforceability / invalidity: Applicable.
Coupon Schedule to Maturity
- 18 March 2021
- 18 September 2021
- 18 March 2022
- 18 September 2022
- 18 March 2023
- 18 September 2023
- 18 March 2024
- 18 September 2024
- 18 March 2025
- 18 September 2025
- 18 March 2026 - Maturity Date