Investing

Origin Energy Finance

Energy

Origin Energy Finance

Latest price

$ 107.92

  • ASX code
    YTMORG
  • Maturity date
    11-Nov-2027
  • Capital structure
    Senior Unsecured
  • Coupon type
    FIXED
  • Coupon P.A
    2.650%
  • Issue Date
    11-Nov-2019
  • Next ex. distribution date
    30-Apr-2021
  • Next interest payment date
    11-May-2021
  • Payment frequency
    Semi-Annual

Issuer

Origin Energy Finance Limited (Origin)

 

Guarantors

Principal Guarantor: Origin Energy Limited (ABN 30 000 051 696)

Other Guarantors:

  • Angari Pty Limited, ABN 15 008 154 907
  • Cogent Energy Pty Limited, ABN 65 121 324 249
  • Oil Investments Pty Limited, ABN 29 007 603 349
  • Origin (LGC) (Aust) Pty Limited, ABN 73 000 000 331
  • Origin Energy (Vic) Pty Limited, ABN 11 086 013 283
  • Origin Energy Asset Management Limited, ABN 44 008 184 192
  • Origin Energy Contracting Limited, ABN 88 009 726 694
  • Origin Energy Electricity Limited, ABN 33 071 052 287
  • Origin Energy Eraring Pty Limited, ACN 164 994 012
  • Origin Energy Eraring Services Pty Limited, ABN 24 164 403 516
  • Origin Energy Geothermal Pty Limited, ABN 12 128 159 277
  • Origin Energy Holdings Pty Limited, ABN 30 004 132 423
  • Origin Energy LPG Limited, ABN 77 000 508 369
  • Origin Energy Pipelines Pty Limited, ABN 84 009 630 648
  • Origin Energy Power Limited, ABN 93 008 289 398
  • Origin Energy Retail Limited, ABN 22 078 868 425
  • Origin Energy SA Pty Limited, ABN 49 008 139 222
  • Origin Energy Services Limited, ABN 93 007 847 010
  • Origin Energy SWC Limited, ABN 48 079 764 391
  • Origin Energy Tasmania Pty Limited, ABN 39 009 539 753
  • Origin Energy Vic Holdings Pty Limited, ABN 43 109 778 092
  • Origin Energy WA Pty Limited, ABN 84 008 920 214
  • Origin Renewable Energy Pty Limited, ABN 61 128 159 044
  • Origin Energy Upstream Holdings Pty Ltd, ACN 105 423 523
  • Sun Retail Pty Limited, ABN 97 078 848 549
  • Wind Power Pty Limited, ABN 68 117 035 766

Together with any Additional Guarantors, but excluding any such Initial Guarantor or Additional Guarantor which has been released from the Guarantees. A list of the current Guarantors, which may change from time to time in accordance with the Trust Deed and the Conditions, is available from the Issuer and/or the Principal Paying Agent upon request.

Base Terms

Offering Circular for a Debt Instrument Programme dated 26 August 2019

Pricing Supplement

Dated 11 November 2019

Nature of the Bonds

Instruments and any relative Coupons will be direct, unsecured, unsubordinated, and general obligations of Origin that will rank pari passu, without any preference among themselves, with all other outstanding unsecured, unsubordinated obligations of Origin, present and future (other than obligations preferred by mandatory provisions of law).

Issue Size

A$300,000,000

Issue Date

11 November 2019

Maturity Date

11 November 2027

Interest Rate and Interest Payment Dates

2.65% per annum, payable semi-annually (in two coupons of 1.325%) in arrears 11 May and 11 November in each year, including the Maturity Date.

Bond Denomination

A$10,000

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.

Key Risks

  • Competition in energy retailing, power generation, gas exploration and production, and in international LNG markets could have an adverse impact on Origin’s income
  • Commodity Markets - Fluctuations in global oil, LNG, gas, coal and LPG market conditions and prices could adversely affect Origin’s business and financial performance
  • Resource Supply - Origin’s gas reserves and resources including those within Australia Pacific LNG are uncertain and may not be recoverable at the levels currently estimated or in the timeframe required to meet contractual gas supply obligations. There is risk associated with Origin’s ability to secure sufficient fuel at competitive prices in order to supply its generation portfolio and its retail business. The commercial viability of Origin’s gas and development activities is dependent on producing reserves into the future, and there is no assurance that its exploration & development projects will be successful in locating and developing recoverable reserves in its exploration tenements
  • Demand & Supply - Changes in customer demand for energy could adversely impact Origin’s revenues and profitability. Volatility in wholesale electricity prices could have an adverse impact on Origin’s profitability
  • Lack of liquidity in the secondary market for the bonds;
  • Liquidity risks - Origin may be unable to meet their obligations when they fall due to a mismatch in cash flows;
  • Funding risk - if capital markets are unstable, Origin may not be able to refinance the bonds in a timely or efficient manner;
  • Interest rate risks – Bondholders may suffer unforeseen losses due to fluctuations in interest rates;
  • Regulatory risks – Regulation in the area of climate change may adversely impact Origin’s profitability. Failure to comply with regulations could harm Origin’s business and relationships with external stakeholders. Failure to comply with regulations could harm Origin’s business and relationships with external stakeholders
  • Litigation risks – Risks relating to litigation and regulatory actions;
  • Operational risks – The risk of loss resulting from inadequate internal processes and controls, people and systems or from external events. Failure to adequately manage health and safety could adversely impact Origin’s workers, reputation and the Community. Delays in project delivery and/or higher than expected costs and/or lower than expected benefits received from a project may adversely affect Origin’s operations and profitability. Origin’s business is subject to operating and asset risks that may adversely impact its financial performance. Origin may experience disputes or difficulties with the Australia Pacific LNG joint venture parties;
  • Technology risks – A cyber security incident could lead to a breach of privacy, disruption of critical business processes or theft of commercially sensitive information is. Technological developments may reduce the value of Origin’s existing assets and decrease revenue.
  • Rehabilitation risks – Origin is liable for the requirements and costs of conducting decommissioning and rehabilitation activities in respect of sites and tenements on which it conducts its activities and as a result of past activities;
  • Default risk – if an event of default occurs under the bonds, or Origin 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.

Key Benefits

Key benefits include:

  • Approximately 7 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.

Early Redemption by Issuer

Yes, having given not less than 30 nor more than 60 days’ notice and requiring payment of the early redemption amount.

Early Redemption by Bondholder

Bondholders of debit instruments may require the issuer to redeem the bonds upon occurrence of a Change of Control.

Negative Pledge

For so long as any of the Notes or the Guarantees are outstanding, the Principal Guarantor will not, and will not permit any Relevant Subsidiary to, create, assume, incur or suffer to exist any mortgage, pledge, charge, security interest, lien or other encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof or any option or other agreement to sell or give a security interest in (each a “Security Interest”), upon any of their respective property or assets to secure any present or future Indebtedness without making effective provision whereby the Notes shall be secured equally and ratably with (or prior to) such Indebtedness to the satisfaction of the Trustee, so long as such Indebtedness shall be so secured, subject to certain exception set out in the bond program documents.

Events of Default

Events of Default include:

  • Payment - a default in the payment of any interest or any additional amounts  due and payable on any Notes and the continuance of such default for a period of 30 days; a default in the payment of any principal of, or any premium on, any Notes when due at the Maturity Date;
  • Warranty or Covenant - a default in the performance or breach of any other covenant or warranty of the Issuer or a Guarantor in the Trust Deed or the Notes and the continuance of such default or breach for a period of 60 days after written notice has been given by the Trustee;
  • Other Indebtedness - a default by the Issuer or any Guarantor in the payment of the principal of, or interest on, any Indebtedness having an aggregate principal amount exceeding A$50,000,000 (or its equivalent in any other currency or currencies) when and as such Indebtedness becomes due and payable, after the expiration of any applicable grace period, or any other default under such Indebtedness of the Issuer or any Guarantor, which default shall have resulted in such Indebtedness becoming or being validly declared due and payable prior to its stated maturity;
  • Judgement - an execution or other legal process to enforce a judgment or distress or attachment in each case in an amount exceeding A$50,000,000 (or its equivalent in any other currency or currencies) is issued, levied, enforced or sued upon or against any part of the property of the Issuer, a Guarantor or any Subsidiary of a Guarantor and is not paid out, satisfied, withdrawn, set aside or stayed pending appeal within 60 days of the date of issue, levy or enforcement; and
  • Enforceability - the Guarantees are held to be unenforceable or invalid in a judicial proceeding, or are claimed in writing by either the Issuer or any Guarantor not to be valid and enforceable, or the Guarantees are denied or disaffirmed in writing by any Guarantor except, in each case, as permitted in accordance with the terms of the Trust Deed;
  • Insolvency - (a) the Issuer or any Guarantor becomes insolvent, admits in writing its inability to pay its debts as they fall due or stops payment of its debts generally;
    (b) the Issuer or any Guarantor enters into or makes any compromise arrangement with its creditors generally including the entering into of some form of moratorium with its creditors generally, other than a compromise arrangement for the purposes of a reconstruction, amalgamation or reorganisation where the relevant entity is solvent;
    (c) a court of competent jurisdiction enters an insolvency administration order in respect of the Issuer or any Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there is appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) over the whole or substantially the whole of the assets of the Issuer or a Guarantor, as the case may be and any such order is not removed, discharged, withdrawn or stayed pending appeal within sixty (60) days thereafter; or
    (d) the Issuer or any Guarantor commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, other than a case commenced under an applicable law not pertaining to bankruptcy or insolvency for the purposes of a reconstruction, amalgamation or reorganisation where the relevant entity is solvent, or consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the relevant entity over the whole or substantially the whole of its assets, or makes any general assignment for the benefit of creditors.

Coupon Schedule to Maturity

  • 11 November 2020
  • 11 May 2021
  • 11 November 2021
  • 11 May 2022
  • 11 November 2022
  • 11 May 2023
  • 11 November 2023
  • 11 May 2024
  • 11 November 2024
  • 11 May 2025
  • 11 November 2025
  • 11 May 2026
  • 11 November 2026
  • 11 May 2027
  • 11 November 2027 - Maturity Date

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