Tuesday 20 May 2014 by Justin McCarthy Company updates

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


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.


The contents of this document are copyright. Other than under the Copyright Act 1968 (Cth), no part of it may be reproduced, distributed or to a third party without FIIG’s prior written permission other than to the recipient’s accountants, tax advisors and lawyers for the purpose of the recipient obtaining advice prior to making any investment decision. FIIG asserts all of its intellectual property rights in relation to this document and reserves its rights to prosecute for breaches of those rights.

The information has been prepared solely for informational purposes only and does not constitute or form part of any offer for sale or subscription of, or solicitations or any offer to buy or subscribe for, or any invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. The information is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. No action has been taken to permit the public distribution of the information in any jurisdiction and the information should not be distributed to any person or entity in any jurisdiction where such distribution would be contrary to applicable law.

The information has not been lodged with Australian Securities and Investments Commission or any other authority. The information is intended for distribution only to financial institutions and professional investors whose ordinary business includes the buying or selling of securities in circumstances where disclosure is not required under Chapter 6D.2 or Chapter 7 of the Corporations Act 2001 of Australia (the “Corporations Act”) and only in such other circumstances as may be permitted by applicable law. Any securities that may be offered by the Issuer in, or into, Australia are offered only as an offer that would not require disclosure to investors under Part 6D.2 or 7.9 of the Corporations Act. This information is directed only to persons to whom disclosure is not required under Part 6D.2 or 7.9 of the Corporations Act. The information is a summary only and does not purport to be complete. It does not amount to an express or implied recommendation or a statement of opinion (or a report or either of those things) with respect to any investment in the Issuer nor does it constitute a financial product or financial advice. The information does not take into account the investment objectives, financial situation or needs of any particular investor. FIIG does not provide accounting, tax or legal advice. Prospective investors are required to make their own independent investigation and appraisal of the business and financial condition of the Issuer and the nature of any securities that may be issued by the Issuer. By accepting receipt of the information the recipient will be deemed to represent that they possess, either individually or through their advisers, sufficient investment expertise to understand the risks involved in any purchase or sale of any financial securities discussed herein.

Certain statements contained in the information may be statements of future expectations and other forward-looking statements. These statements involve subjective judgement and analysis and may be based on third party sources and are subject to significant known and unknown uncertainties, risks and contingencies outside the control of the Issuer which may cause actual results to vary materially from those expressed or implied by these forward looking statements. Forward-looking statements contained in the information regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Opinions expressed are present opinions only and are subject to change without further notice. No representation or warranty is given as to the accuracy or completeness of the information contained herein. There is no obligation to update, modify or amend the information or to otherwise notify the recipient if information, opinion, projection, forward-looking statement, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Any offering of any security or other financial instrument that may be related to the subject matter of this communication will be made pursuant to separate and distinct documentation (“Offering Documents”) and in such case the information will be superseded in its entirety by any such Offering Documents in its final form. In addition, because the information is a summary only, it may not contain all material terms and the information in and of itself should not form the basis for any investment decision. Any decision to purchase securities in the context of a proposed offering of securities, if any, should be made solely on the basis of information contained in the Offering Documents published in relation to such an offering.

Neither FIIG nor the Issuer shall have any liability, contingent or otherwise, to any user of the information or to third parties, or any responsibility whatsoever, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance or completeness of the information. In no event will FIIG or the Issuer be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of the user using information even if it has been advised of the possibility of such damages.

FIIG has been engaged by the Issuer to arrange the issue and sale of the Notes by the company and will receive fees from the issuer of the Notes. FIIG, its directors and employees and related parties may have an interest in the company and any securities issued by the company and earn fees or revenue in relation to dealing in those securities.

FIIG provides general financial product advice only. As a result, this document, and any information or advice, has been provided by FIIG without taking account of your objectives, financial situation and needs. FIIG’s AFS Licence does not authorise it to give personal advice. Because of this, you should, before acting on any advice from FIIG, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If this document, or any advice, relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a product disclosure statement relating to the product and consider the statement before making any decision about whether to acquire the product. Neither FIIG, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice. Any reference to credit ratings of companies, entities or financial products must only be relied upon by a ‘wholesale client’ as that term is defined in section 761G of the Corporations Act 2001 (Cth). FIIG strongly recommends that you seek independent accounting, financial, taxation, and legal advice, tailored to your specific objectives, financial situation or needs, prior to making any investment decision. FIIG does not provide tax advice and is not a registered tax agent or tax (financial) advisor, nor are any of FIIG’s staff or authorised representatives. FIIG does not make a market in the securities or products that may be referred to in this document. A copy of FIIG’s current Financial Services Guide is available at www.fiig.com.au/fsg.

An investment in notes or corporate bonds should not be compared to a bank deposit. Notes and corporate bonds have a greater risk of loss of some or all of an investor’s capital when compared to bank deposits. Past performance of any product described on any communication from FIIG is not a reliable indication of future performance. Forecasts contained in this document are predictive in character and based on assumptions such as a 2.5% p.a. assumed rate of inflation, foreign exchange rates or forward interest rate curves generally available at the time and no reliance should be placed on the accuracy of any forecast information. The actual results may differ substantially from the forecasts and are subject to change without further notice. FIIG is not licensed to provide foreign exchange hedging or deal in foreign exchange contracts services. The information in this document is strictly confidential. If you are not the intended recipient of the information contained in this document, you may not disclose or use the information in any way. No liability is accepted for any unauthorised use of the information contained in this document. FIIG is the owner of the copyright material in this document unless otherwise specified.

The FIIG research analyst certifies that all of the views expressed in this document accurately reflects their views about the companies and financial products referred to in this document and that their remuneration is not directly or indirectly related to the views of the research analyst. This document is not available for distribution outside Australia and New Zealand and may not be passed on to any third party without the prior written consent of FIIG.