Incitec Pivot Limited
Certain subsidiaries of the Issuer, so that combined with the Issuer they comprise at least 80% of EBITDA and 80% of the total assets of the group.
Australian Dollar Medium Term Note Programme dated 30 July 2013
Dated 16 August 2013
Nature of the bonds
The Bonds will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and 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.
Interest rate/coupon rate
5.75% per annum, payable semi-annually (in two coupons of 2.875%) in arrears on 21 February and 21 August in each year, including the Maturity Date.
Step-up Coupon on Ratings Change
The Coupon may step-up by 1.0% if the Issuer falls below a certain rating.
Repayments 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
Yes, in certain circumstances, for tax reasons.
Early Redemption by Bondholder
Major Divestment - where the Issuer or Guarantor ceases to carry on its (or a major part of) its business, or sells, transfers or disposes of the whole or a major part of the business, and there is a credit rating downgrade below a certain rating, then holders of the Bonds can “Put” the Bonds back to the Issuer prior to the Maturity Date.
Change of Control - where there is a Change of Control and the Issuer is downgraded below a certain level, then bondholders can “Put” the Bonds back to the Issuer prior to the Maturity Date.
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 value of an investment in Incitec Pivot Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Incitec Pivot’s financial performance. The following risks may also affect an investment in Incitec Pivot 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;
- Commodity risk – fluctuations in commodity prices and impacts of ongoing global economic volatility may negatively affect Incitec Pivot’s results, including cash flows and asset values;
- Currency risk – Incitec Pivot’s financial results may be negatively affected by currency exchange rate fluctuations;
- Litigation risk – 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.
So long as any of the Notes remain outstanding, 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 (“Security Interest”), other than a Permitted Security Interest, upon the whole or any part of its present or future assets or revenues.
Where a Permitted Security Interest means Security Interests that arise by operation of law, liens and rights of set-off, non-recourse Security Interests that are limited to a particular assets in respect of joint ventures, acquisitions or developments and other Security Interests that together with all other Permitted Security Interests do not exceed 10% of the total assets of the group.
(a) Gearing Ratio (Net Debt: EBITDA) not to be greater than 3.5:1
(b) Interest Cover Ratio (EBITDA: Interest Expense) to be at least 3.00:1
Events of Default
Events of Default include:
- Failure to Pay: Applicable with a cure period of 2 Business Days;
- Breach of Other Obligations: Applicable with a cure period of 15 Business Days;
- Cross Default: Applicable with a Threshold Amount of A$25,000,000;
- Enforcement or Attachment: Applicable in respect of all or the major part of the property of the Issuer and the Guarantors (taken as a whole);
- Insolvency: Applicable to the Issuer or a Guarantor:
- Administration: Applicable in respect of the Issuer or a Guarantor;
- Obligations Unenforceable: Applicable.
Coupon Schedule to Maturity
- 21 February 2017
- 21 August 2017
- 21 February 2018
- 21 August 2018
- 21 February 2019 - Maturity Date