International Financing Review Asia April 4 2020 41COUNTRY REPORT MALAYSIANin an exchange filing last Monday.
No break fee is payable and both parties
have agreed they have no other liability to
each other as a result of the termination.
The move is a blow to a NZ$190m
(US$107m) five-year loan backing the
proposed buyout that had been in
syndication since November.
The sponsors were acquiring Abano
via an entity called ADAMS NZ BIDCO for an
enterprise value of NZ$300m.
“The Abano board and management
team will continue to assess alternative
options for the company, with a view to
maximising shareholder value,” the filing
said. “This includes an intention to engage
with Bidco, which has indicated that it
is willing to explore whether there is an
alternative potential transaction.”
Abano also announced plans for
temporary closure of its Australian dental
practices from Monday. New Zealand dental
practices have been temporarily closed
since March 24.
The termination of the takeover and
temporary closures of operations in both
Australia and New Zealand come in the
wake of the coronavirus pandemic.Abano is assessing the operational and
financial impacts of the closure on the
business, as well as banking facilities and
any additional funding requirements.
The company currently has net debt of
approximately NZ$130m and total bank
facilities of approximately NZ$163m. The
company is in constructive discussions with
its banking partners to assess and provide
for future requirements.› SPARK COMPLETES BILATERAL REVOLVERSSPARK FINANCE, the wholly owned subsidiary
of telecommunications company Spark
New Zealand, has put in place two
revolving credit facilities totaling NZ$150m,
according to a filing to the New Zealand
Exchange on Thursday.
The two NZ$75m facilities, which mature
on October 2 2021, will be used to refinance
£18m (US$20m) 5.75% notes maturing on
April 6 this year and for general corporate
purposes.
ANZ Bank New Zealand and Westpac New
Zealand provided the bilateral loans.
Earlier last week, Spark announced it had
extended its NZ$200m standby revolvingcredit facility by one year to April 30 2023
with Australian and global banks. The
facility’s size reduces to NZ$167m from
May 1 2022 to April 30 2023.
In April last year, Spark New Zealand
extended a NZ$200m revolver it signed in
April 2017 by one year to April 2022.
Citibank was the mandated lead arranger
and bookrunner of the 2019 facility, while
ANZ, Bank of New Zealand, Commonwealth
Bank of Australia, HSBC, MUFG Bank and
Westpac Banking Corp were participants,
according to Refinitiv LPC data.New Zealand ramps up issuance
Bonds Federal and local governments prepare extra syndicated supplyThe NEW ZEALAND TREASURY (Aaa/AA+/AA+)
is looking to syndicated sales to help meet
its elevated bond issuance forecast for fiscal
year 2019-20.
Projected gross bond supply in the current
fiscal year has been increased again, by
NZ$12bn (US$7.1bn) to NZ$25bn, as part
of the country’s response to the Covid-19
outbreak. This follows a NZ$3bn increase to
NZ$13bn on March 17.
The Treasury has mandated ANZ, BNZ,
CBA and UBS for a syndicated tap of the
NZ$2.9bn 1.5% May 15 2031 nominal bond
this week, while there may be another
syndication offering before the fiscal year-
end on June 30, either via a new nominal
bond or a tap of an existing bond line.
With NZ$8bn sold in the current fiscal year,
NEW ZEALAND DEBT MANAGEMENT is stepping up its
tender operations and will now release monthly
schedules for each month in advance.
For April, three nominal bond tenders will
be held each Wednesday raising a combined
NZ$800m at a time, and NZ$4bn in total
over the five Wednesdays, starting with
April 1’s tender of NZ$350m April 15 2033s,
NZ$250m April 20 2029s and NZ$200m
April 15 2037s.Treasury bills on issue are forecast to be
NZ$7bn at June 30, NZ$3bn higher than
forecasts updated on March 17.
The previous syndicated issue last
September raised the maximum NZ$2bn the
Treasury was targeting when it opened the
1.50% May 15 2031 line.
NZGBs historically enjoy some scarcity
value to reflect the country’s relatively small
government debt, which has been around
20%–25% of GDP for several years, while they
again offer the highest yield, in absolute terms,
among Triple A/Double A rated sovereigns.
For example, the May 2031 NZGBs were
yielding 1.39% last Friday, which compares
with Australian, US, UK and German
benchmark 10-year yields of 0.81%, 0.61%,
0.33% and minus 0.43%, respectively.
Liquidity can be a problem, partly
because New Zealand has not met the size
requirements of Citigroup’s nominal World
Government Bond Index, but the country
should soon become eligible as sovereign
supply is ramped up.LGFA PLANS BOND
With regional administrations also facing
severe fiscal pressures, NEW ZEALAND LOCALGOVERNMENT FUNDING AGENCY, rated AA+/AA+
(S&P/Fitch), has hired ANZ, BNZ, CBA and
Westpac for a senior unsecured six-year (April
15 2026) bond offering for institutional and
retail investors.
LGFA previously issued a NZ$500m 1.5%
short 10-year retail note last August, having
debuted in the domestic bond market in
March 2019 with a non-sovereign record
NZ$1bn sale of 2.25% five-year (April 15
2024) notes.
The agency, which provides cheap debt
financing to participating local councils,
previously focused on small, regular tender
issues, which are allocated on a sliding
scale based on the councils’ sizes and credit
ratings.
The New Zealand government owns 20%
of LGFA, while 30 regional and territorial
councils, including Auckland Council,
Christchurch City and Wellington City, hold
the remaining 80%.
LGFA has identical S&P and Fitch ratings
to New Zealand sovereign bonds, but
has no rating from Moody’s (which rates
the sovereign Aaa) and no government
guarantee.
JOHN WEAVERSTop bookrunners of New Zealand syndicated loans
1/1/20 – 31/3/20
Amount
Name Deals US$(m) %
1 ANZ 3 891.1 58.1
2 CBA 1 365.7 23.8
3 ING 1 184.0 12.0
4 MUFG 1 93.0 6.1
Total 6 1,533.8
* Based on market of syndication and market total
Proportional credit
Source: Refinitiv data SDC Code: S13bB&RXQWU\LQGG