NEW ZEALAND BUSINESS NEWS
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Contact Energy, the listed electricity generator and retailer that supplies power to households and businesses across New Zealand, has lodged a product disclosure statement for an offer of up to $225 million of green capital bonds to retail and institutional investors. The offer may accept oversubscriptions at Contact’s discretion.
The bonds are unsecured, subordinated, redeemable, cumulative and interest-bearing. Proceeds will fund and refinance renewable generation and other eligible green assets, in line with the company’s Sustainable Finance Framework.
If the bookbuild is successful, Contact intends to exercise its right to redeem its $225 million of green capital bonds quoted on the NZX Debt Market under the ticker code CEN060. The redemption would take place on 19 November 2026, the first reset date for those bonds, at their principal amount of $1.00 each plus any accrued but unpaid interest.
Trading in the CEN060 bonds is expected to be suspended from market close on 5 November 2026. Contact expects to issue a formal notice of redemption to holders on or about that date.
The new bonds carry a term of 30.5 years. Contact may repay some or all of them early in certain circumstances, including on any reset date, the first of which falls 5.5 years after the issue date and every five years thereafter.
The interest rate will be fixed for an initial period of 5.5 years, then reset on each reset date unless the bonds are redeemed earlier. Contact may, in its absolute discretion, defer any interest payment for up to five years. Deferred interest would itself accrue interest, compounding on each interest payment date at the prevailing rate, until the date on which all unpaid interest is paid. Unpaid interest is cumulative.
S&P Global Ratings has assigned the bonds an issue credit rating of BB+, two notches below Contact’s issuer credit rating. The release says the gap reflects the bonds’ subordination and the potential to defer interest payments.
The offer is expected to open on 2 November 2026, when the indicative initial margin range and the minimum initial interest rate will be announced. It is expected to close on 5 November 2026, when the initial margin and initial interest rate will be announced. The bonds are expected to issue on 19 November 2026 and be quoted on the NZX Debt Market on 20 November 2026.
There is no public pool. All bonds are reserved for clients of the joint lead managers, institutional investors, and other primary market participants invited to the bookbuild. Investors can register interest through a joint lead manager or their usual financial adviser, and must obtain the product disclosure statement before deciding to acquire any bonds.
The statement is available on the Disclose register under offer number OFR15288 and at contact.co.nz/capitalbondoffer. The offer is being made under the Financial Markets Conduct Act 2013. Forsyth Barr Capital Markets is arranger and joint lead manager, alongside Bank of New Zealand and Craigs Investment Partners.
Contact also advises that it has amended its Master Trust Deed dated 21 August 2015 so that notices or other communications to holders of a listed series are deemed given on the date Contact publishes them via the NZX market announcement platform. A copy of the amending deed will be available at contact.co.nz/capitalbondoffer.
For business owners holding Contact’s existing CEN060 bonds, the practical question is timing. If the bookbuild succeeds, those bonds will be redeemed at $1.00 each plus accrued interest, and trading is expected to stop at market close on 5 November. Holders wanting to retain exposure to Contact debt would need to be clients of a joint lead manager or otherwise invited into the bookbuild, because the new offer has no public pool.
The deferral feature and the BB+ rating matter to anyone weighing the new bonds against other income options. Interest can be postponed for up to five years at Contact’s discretion, which is a materially different risk from a standard fixed-income investment, and the rating sits two notches below the company’s own.
The use of proceeds ties the raise to Contact’s renewable generation pipeline, so the bonds also let investors fund that build without buying equity.
Source: NZX announcements
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