Tuesday 20 May 2014 by Justin McCarthy Company updates

Adani Abbot Point Terminal Pty Ltd – six year 6.10% fixed rate initial bond offer

THIS CONTENT IS SUITABLE FOR WHOLESALE INVESTORS ONLY

On Monday 19 May, Adani Abbot Point Terminal Pty Ltd (AAPT) launched a new six year 6.10% p.a. fixed rate bond issue through FIIG Securities Limited (FIIG). The deal is the first rated deal brought by FIIG

With the bonds expected to be ascribed investment grade by both Standard and Poor’s and Moody’s.

AAPT are seeking to raise a minimum of $75m from wholesale investors, with the ability to raise more.

The initial bond offer is expected to close on Wednesday (subject to change).

Those interested in investing in the AAPT 6.10% bond are recommended to register their interest with their FIIG representative as soon as possible.

The following is a summary of the important credit and structural features, as well as the key dates for investors and further information available to wholesale investors.

Key credit points

  • Adani Group is one of India's leading business houses and one of the largest Indian investors in Australia with interests in mining and associated infrastructure
  • One of Adani Group's interests in Australia is the Abbot Point Coal Terminal, the most northern bulk coal port on the east coast of Australia. AAPT subleases the land and fixtures for the Terminal from a Holding Trust (Mundra Port Holdings Trust ("MPHT")) which holds a 99 year lease from the Queensland Government. Both MPHT and AAPT are ultimately owned by Adani
  • The Issue is expected to be rated investment grade by Standard and Poor's and Moody's
  • The Coal Terminal is a strategically important asset for Queensland and Australia with an integrated logistics chain capable of handling 50 million tonnes per annum (Mtpa) of coal
  • AAPT enjoys long term contracts to handle coal from mines whose ultimate parents are some of the world's biggest mining companies, many of which are investment grade
  • Stable and predictable cashflows back this senior secured Note issue as the charges to the users of the Terminal are on a take or pay basis

Notes summary

  • Fixed rate offering with an interest rate of 6.10% per annum. This interest rate is be equal to Monday's 6 year mid-swap rate plus 2.50%
  • Six year maturity with interest paid semi-annually in arrears
  • The Notes rank as senior secured obligations of AAPT
  • There is a Change of Control protection @ 101, providing ratings would be downgraded upon the Change of Control
  • The Notes are callable on 30 days notice, subject to a make-whole payment being made (except no make-whole is payable in the six months prior to maturity)
  • In a wind up of AAPT, the Notes rank before Ordinary Shares and any unsecured or subordinated creditors of AAPT and equally with any other senior secured indebtedness of AAPT, including their existing medium term Note issue
  • If AAPT suffers a ratings downgrade, the interest rate paid on the Notes will increase
  • The Notes benefit from a covenant package that limits and restricts AAPT's ability to borrow, to make equity distributions and to sell certain assets.  The Notes are structured in line with AAPT's existing medium term Note issue and provide key structural benefits for investors when compared to recent ASX listed corporate hybrid transactions
  • The Notes are not listed on an exchange

Key dates

  • MONDAY 19 MAY 2014: Offer Opens - Offer opens to FIIG clients to subscribe for Notes. FIIG clients are invited to provide Firm Bids for Notes by contacting your FIIG Representative
  • WEDNESDAY 21 MAY 2014: Offer Closes - FIIG clients are to provide Firm Bids for Notes as soon as possible but no later than by close of business on Wednesday 21 May 2014 by contacting your FIIG Representative. FIIG reserves the right to close the Offer earlier or later in its absolute discretion.
    Firm Allocation made by FIIG to clients - After you inform FIIG of your Firm Bid, FIIG will send you a firm allocation of Notes "Firm Allocation" by email with the pricing and payment details in relation to the Notes.
    Clients to accept by reply email - Clients must, by reply email to FIIG, irrevocably accept the Firm Allocation and forward cleared funds to FIIG immediately upon accepting the Firm Allocation. You will only be entitled to an allocation of Notes if FIIG has received payment of cleared funds.
    Acknowledgement sent by FIIG - Upon FIIG's receipt of your emailed acceptance of the Firm Allocation, FIIG will send you an acknowledgement by email to you with a reminder of payment details.
  • TUESDAY 27 MAY 2014: Money to be received by FIIG - Due date for the receipt of Cleared Funds to FIIG for a Firm Allocation of Notes
  • FRIDAY 30 MAY 2014: Settlement date and Notes issued

(Note: the dates set out above may be varied at FIIG's absolute discretion without further notice to you).

Further information available to wholesale investors

Wholesale investors can obtain the following documents by contacting their FIIG representative:

  • The Preliminary Information Memorandum, which is subject to completion, dated 19 May 2014 includes the draft terms and conditions of the Notes, and
  • Research report prepared by FIIG

For further information regarding this issue or to register your interest, please contact your FIIG representative as soon as possible.

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