Tuesday 29 November 2016 by FIIG Research Company updates

Company updates – Adani Abbot Point, BHP Billiton, NEXTDC and 360 Capital

Adani launched a buyback offer for its 2018 bonds, BHP’s rating outlook changed, NEXTDC misses first call date notice to bondholders and 360 Capital Group announced sale of 360 Capital Investment Management to Centuria Capital Group

Adani Abbot Point Terminal

Adani Abbot Point Terminal (AAPT) has launched a buyback offer for up to A$85m of its fixed rate November 2018 bonds on 29 November 2016. The bonds were issued as a A$500m deal in October 2013, are set to mature on 1 November 2018 and were initially priced at 225 basis points (bps) over semi quarterly swap. In August 2016, AAPT repurchasedExternal link - opens in a new window A$62.9m of these bonds.

KangaNews made the following comments:

The offer invites bondholders to offer to tender their notes for purchase with a maximum purchase spread of 500 basis points.

According to the buyback offer announcement, the purpose of the tender offer is “to reduce the level of the gross debt outstanding and the resulting interest expense” incurred by the company. The tender offer – which is being managed by Commonwealth Bank of Australia – expires on 7 December.”

BHP Billiton

Global ratings agency Moody’s has changed the rating outlook of BHP Billiton Limited and BHP Billiton Plc to stable from negative, and affirmed their senior unsecured and short term ratings. Further, Moody’s has also changed the outlook to stable from negative for the ratings of subsidiaries and affirmed the other ratings of the group.

Moody’s made the following comments:

“The change in outlook to stable reflects our expectation that BHP Billiton will continue to see margin improvement and solid free cash flow generation over the next 12 to 18 months", says Matthew Moore, a Moody's Vice President and Senior Credit Officer. "This improved earnings and cash flow generation will allow for its credit metrics to improve to levels more appropriate for the rating".

Moody's expectation for a continued improvement in earnings and cash flow, from the weaker levels evidenced in fiscal 2016, reflects the company's ongoing initiatives to reduce costs and improve productivity, as well as its lower capital expenditures and lower dividend payouts.

The improvement also reflects the recovery observed in the prices for the commodities BHP Billiton produces, particularly iron ore and coal, relative to the levels evidenced in 2015 and early 2016.”


Data centre operator NEXTDC did not give notice to call its bonds on the first call date of 16 December 2016. NEXTDC needs to provide at least 30 days, and not more than 60 days’ notice to call.

There has been potential for the company to make an early call given its improved credit profile – the notes represent relatively expensive funding, and the call price increases over time.

The next call date is 16 June 2017 at 103.0%.

360 Capital

360 Capital Group announced it has entered into a transaction to sell 360 Capital Investment Management Limited (CIML) as well as its co investment stakes in all funds – excluding its Total Return Fund and Subiaco Square Property Trust – to Centuria Capital Group for approximately $290.7m.

The proposed transaction is subject to bond holder approval. Further, 360 Capital intends to fully repay its corporate bonds and be debt free post completion of the transaction.

An announcement can be found here.External link - opens in a new window