COUNTRY REPORT AUSTRALIA› INVOCARE LOAN INTO GEN SYN
Funeral services provider INVOCARE is
launching into general syndication a
A$450m (US$350m) loan, according to an
information flyer from the company.
The facility will fund a A$200m
expansion programme and refinance
loans. InvoCare has net debt of A$236.3m
with a liquidity buffer of A$53.1m. Its
interest cover ratio is over 11x and
gearing is 2.0x.
The company plans to retain an
investment-grade rated capital structure
after raising the debt.
InvoCare is the largest funeral services
operator in Australia, New Zealand and
Singapore.
Its post-tax earnings for the first half of
2017 rose 13.5% to A$24.5m.
Boutique corporate firm Investor Capital
Advisory is advising InvoCare on the debt
raising.
› COOPER ENERGY LOAN IN GEN SYN
A A$250m seven-year loan for COOPER
ENERGY has been launched into general
syndication via mandated lead arrangers,
bookrunners and underwriters ANZ and
Natixis.
The reserve-based lending facility will
be used to develop the company’s Sole gas
field, located offshore Victoria state.
The facility has a two-year construction
phase with an interest margin around
400bp over BBSY, which will drop to about
300bp over BBSY when the project moves
into the operational phase. The loan will
fully amortise with 25% of its gas reserves
available at maturity date.
The underwriters aim to sell down
about half of the loan. They have invited
a select group of existing and new lenders
to commit to tickets of A$75m or A$50m.
One-on-one meetings were held earlier
last week and responses are due in early
November.
In addition to the loan, Cooper has also
raised a A$15m three-year working capital
facility solely from ANZ and an equity
offering of A$135m. The working capital
facility will not be syndicated.
The project loan has three financial
covenants – a liquidity reserve of A$20m, a
debt service coverage test after completion
of the field, and that cashflow from the
assets in the borrowing-base facility can
only be applied to the expenditures that
the assets incurred within the loan or debt
service during construction.
The project is expected to yield annual
gas sales of 24PJ, roughly four times Cooper
Energy’s current production. About 75%
of the gas has been contracted under
long-term agreements with AGL Energy,
EnergyAustralia, Alinta Energy and O-I
Australia.EQUITY CAPITAL MARKETS
› NETWEALTH READIES ASX IPOAustralian superannuation platform
NETWEALTH stands to raise up to A$257m
(US$199m) from an ASX IPO later this
month, according to a source close to the
plan.
The company has set a price range of
A$3.10–A$3.70 for the sale of 69.3m shares.
The company’s market capitalisation
could reach A$879m, the source said.
Bookbuilding for the institutional portion
of the IPO starts on October 19.
Credit Suisse and UBS are advising on the
float.› WORLEYPARSONS SEALS INSTO RIGHTSWORLEYPARSONS has completed the
institutional portion of its A$322m rights
issue, according to a statement from the
oilfield services company.
The 1-for-10 non-renounceable rights
issue, involving 24.8m new shares, priced
at A$13 each, or at a discount of 8% to
the theoretical ex-rights price of A$14.13.
The institutional offer raised A$253m at a
take-up rate of 98.4%.
Proceeds from the rights issue will fund
the company’s takeover of AFW UK Oil
and Gas. Major shareholders Dar Group
and John Grill have committed to take upQantas makes innovative move for funds
Loans Facility allows airline to switch types of aircraft used as collateralQantas Airways is raising a A$350m
(US$272m) loan that allows it to switch the
types of aircraft used as collateral in, what
bankers and analysts say is, the world’s first
aviation financing of this type.
The loan is the first of a series under a
facility programme that the Australian airline
set up.
Qantas reported near-record profits in the
year to June.
The security for each loan includes a
pool of Qantas planes not been pledged as
collateral, including the Airbus A320 family
and Boeing 737 narrowbodies, as well as
A330 and B787 widebodies, shows a term-
sheet on the deal that Reuter has reviewed.
“It also gives us more flexibility in terms of
what aircraft are encumbered, allowing us to
change the aircraft depending on possible
fleet changes or future plans,” a Qantas
spokesman said.
BNP Paribas is sole structuring bank, aswell as joint mandated lead arranger and
bookrunner with National Australia Bank.
The eight-year loan will help Qantas
refinance part of A$442m in secured aircraft
and other amortising debt maturing in
the financial year ending in June 2018, the
Qantas spokesman has said.
“Qantas is trying to use this rather clever
structured financing tool to monetise all
its assets. Whenever aircraft is added or
removed from the pool, it could result in
pricing adjustments beneficial to the airline,”
said Shukor Yusof, founder of aviation
consulting firm Endau Analytics.
In May, Moody’s upgraded the carrier’s
credit rating by one notch to Baa2. Qantas
regained its investment-grade status from
Moody’s in 2016 and from S&P in 2015 after
slipping into junk territory in 2013.
Aviation finance is seen as attractive
to banks, insurers and pension funds for
providing long-term dollar-denominatedreturns above those of some other asset
classes, on investments backed against
assets that can be moved easily.
The loan was sold down to 10 other
financial institutions and was about twice
oversubscribed, according to the term-sheet
and sources.
“The facility appealed to both specialised
aviation banks, as well as traditional
corporate lenders, looking to take credit
exposure on longer maturity terms,” the
term-sheet said.
The loan has no amortisation, meaning that
the principal is due at the end of eight years.
Analysts and bankers have said this type
of loan makes more sense for mature airlines
because typically carriers in growth mode
had younger fleets that tended to be pledged
as collateral already.
Both BNP and NAB confirmed their roles
on the loan.
ANSHUMAN DAGA