Aurizon chief financial officer Pam Bains says the successful pricing of $425 million in medium term bonds will help the operator diversify its funding sources and lengthen its debt maturity profile.
Aurizon Holdings told the ASX on Wednesday its subsidiary, Aurizon Network, was issuing $425 million in 7-year notes.
The notes will be issued at a fixed coupon of 4% per annum, pricing at 177 basis points over the 7-year swap rate.
The operator expects the bonds to be rated at Baa1 and BBB+ by Moody’s and Standard & Poor’s, respectively, in line with Aurizon Network’s existing debt facilities.
Aurizon said the proceeds from the notes will pay off existing bank debt, which matures in 2018. The new notes will mature in June 2024.
“This issuance represents a successful return ot the domestic bond market and marks another step in fulfilling our strategic objectives to diversify funding sources and lengthen our debt maturity profile,” Bains said on June 14.
“We are very pleased with the strong support received from debt investors for Aurizon Network.”