Market Release l 19 May 2014

Transcription

1 Market Release l 19 May 2014 Auckland Airport launches fixed rate bond offer to public Auckland International Airport Limited ( Auckland Airport ) confirmed today that it is offering up to NZ$150 million fixed rate bonds to the New Zealand public. The bond issue will be undertaken in reliance on the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act The offer is expected to open tomorrow, 20 May 2014, and the indicative margin for the bonds is 0.90% per annum. An announcement of the actual margin and interest rate on the bonds will be made following the bookbuild process, expected to be on 23 May The bonds will mature on 28 May 2021 and are expected to be quoted on the NZX Debt Market.* The bonds are expected to be assigned a long-term credit rating of A- by Standard & Poor s. Simon Robertson, Auckland Airport s chief financial officer, says, The proceeds from the issue will be used to partially refinance our $454 million capital return to shareholders as well as other general corporate purposes. Full details of the bond issue are contained in the terms sheet which has been prepared for the offer and is attached. A copy of the presentation that Auckland Airport will be giving to investors is also attached.

2 ANZ Bank New Zealand Limited has been appointed as Lead Manager for the issue. Deutsche Craigs Limited and Forsyth Barr Limited have been appointed as Co-Managers, says Mr Robertson. There is no public pool for the bond offer, with 100% of the bonds reserved for clients of the Lead Manager and Co-Managers, institutional investors and other market participants. Investors can register their expressions of interest by contacting their normal financial advisers or the Lead Manager or Co- Managers: ANZ: Deutsche Craigs: Forsyth Barr: * Application has been made to NZX Limited for permission to quote the bonds on the NZX Debt Market and all the requirements of NZX relating to that application that can be complied with on or before the date of the terms sheet have been duly complied with. However, NZX accepts no responsibility for any statement in the terms sheet or this announcement. NZX is a registered exchange, and the NZX Debt Market is a registered market, each regulated under the Securities Markets Act Ends For further information please contact: Campbell De Morgan Treasury & Investor Relations Specialist campbell.demorgan@aucklandairport.co.nz

3 Seven Year Fixed Rate Bonds Auckland International Airport Limited 20 May 2014

4 Disclaimer Auckland International Airport Limited (the Issuer or Auckland Airport ) is seeking to issue up to NZ$150 million of unsecured, unsubordinated fixed rate bonds ( Bonds ) for general corporate purposes and the refinancing of the April 2014 capital return to shareholders. Application has been made to NZX Limited ( NZX ) for permission to quote the Bonds on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of this document have been duly complied with. However, the Bonds have not yet been approved for trading and NZX accepts no responsibility for any statement in this document. NZX is a registered exchange, and the NZX Debt Market is a registered market under the Securities Markets Act This document does not constitute a recommendation by the Issuer, ANZ Bank New Zealand Limited (the "Lead Manager and Organising Participant"), Deutsche Craigs Limited or Forsyth Barr Limited (together, the Co-Managers ), The New Zealand Guardian Trust Company Limited (the "Trustee") nor any of their respective directors, officers, employees or agents to subscribe for, or purchase, any of the Bonds. The Issuer, the Lead Manager and Organising Participant, the Co-Managers and the Trustee, and their respective directors, officers, employees and agents accept no liability whatsoever for any loss arising from this document or its contents or otherwise arising in connection with the offer of Bonds or any person's investment in the Bonds. This document is for preliminary information purposes only and is not an offer to sell or the solicitation of an offer to purchase or subscribe for the Bonds and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information in this document is given in good faith and has been obtained from sources believed to be reliable and accurate at the date of preparation, but its accuracy, correctness and completeness cannot be guaranteed. All of the data provided in this document is derived from publicly available information in relation to the Issuer (including the annual report of the Issuer for its financial year ended 30 June 2013), unless otherwise indicated. This presentation is dated 20 May Selling restrictions The Bonds may only be offered for sale or sold in New Zealand in conformity with all applicable laws and regulations in New Zealand. No Bonds may be offered for sale or sold in any other country or jurisdiction except in conformity with all applicable laws and regulations of that country or jurisdiction. No offering document or other offering material in respect of the Bonds may be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations in that country or jurisdiction. No action has been or will be taken by the Issuer which would permit an offer of Bonds to the public, or possession or distribution of any offering material, in any country or jurisdiction where action for that purpose is required (other than New Zealand). By purchasing the bonds, each holder is deemed to have indemnified the Issuer, the Lead Manager and Organising Participant, the Co-Managers and the Trustee for any loss suffered by any of them by reason of any breach of the above selling restrictions.

5 Indicative Terms Sheet Description of Bonds Issuer Long-Term Credit Rating (S&P) A- Expected Long-Term Issue Credit Rating (S&P) A- Issue Amount Direct, unsecured, unsubordinated, fixed rate debt obligations of Auckland Airport Up to NZ$150 million Opening Date Tuesday, 20 May 2014 Closing Date 11.00am, Friday, 23 May 2014 Issue Date Wednesday, 28 May 2014 Tenor 7 years Maturity Date Friday, 28 May 2021 Interest Rate Base Rate Indicative Issue Margin Interest Payment Dates Minimum Denomination Interest Payments Lead Manager Co-Managers Registrar The aggregate of the Base Rate and the Margin The semi-annual mid-market swap rate for an interest rate swap of a term matching the period from the Issue Date to the Maturity Date 0.90 percent per annum 28 May and 28 November in each year until and including the Maturity Date. NZ$10,000 and multiples of NZ$1,000 thereafter Semi-annually in arrears ANZ Deutsche Craigs Limited/Forsyth Barr Limited Link Market Services Limited 3

6 Company Position in the Group Investing in Auckland International Airport Limited the parent Auckland International Airport Limited is listed on the NZX and ASX. Acquired 24.55% ownership of North Queensland Airports (Cairns and Mackay) in January Auckland International Airport Limited (the Issuer) Acquired 24.99% of Queenstown Airport in July Has a 20% ownership in 4+ star Novotel hotel limited partnership located next to Auckland Airport s international terminal (opened in May 2011). Auckland Airport Limited 20.00% 24.55% 24.99% Tainui Auckland Airport Hotel LP Auckland Airport Holdings Limited Stapled Securities of North Queensland Airports Group Auckland Airport Holdings (No 2) Limited Queenstown Airport Corporation Limited Auckland International Airport Limited - Employee Share Purchase Plan 4

7 New Zealand s busiest airport and our international gateway Auckland Airport is the largest and busiest airport in New Zealand in terms of passenger movements and revenue. International passengers represented 53% of total passenger movements in the year to 30 June 2013, the highest proportion of all Australasian airports. Second highest number of international passengers in Australasia, second only to Sydney. (000 s) Source: Passenger information has been taken from each airport s monthly traffic update (via their individual websites) or from ACI Statistics for the 12 month period ending 31 December

8 Historically Resilient Business The business has been resilient during times of stress in global economies and during times of external negative events. SARS Outbreak Avian Flu Outbreak Sub Prime Crisis and Global Recession Christchurch Earthquake Sept 11 Terrorist Attacks 6

9 Gateway to New Zealand 75% of New Zealand s visitors arrive or depart from Auckland Airport, and over 90% of long haul visitor arrivals. Only commercial airport in New Zealand s largest city 40% of New Zealand s total population within a two hour drive. No curfew, operating 24 hours a day. Auckland is New Zealand s centre for commercial, industrial, residential and migration growth. Auckland is a very culturally diverse city almost 40% of the people living in Auckland were born overseas. Auckland Airport s broad mix of purpose of travel (Holiday, Visit Friends/Relatives, Business, Education) benefit from the diverse population base. * 2012 Population Estimate Per Statistics New Zealand. Catchment data per Property Economics (2012) 7

10 Significant Land Holdings ---- Auckland Airport boundary ---- Approx. CBD boundaries (Bounded by waterfront and motorways) Auckland Airport owns approximately 1,500 hectares of freehold land. The land holding provides opportunities for expansion of aeronautical infrastructure and growth from rental income streams. 8

11 Our Strategy Faster, Higher, Stronger GROW TRAVEL MARKETS STRENGTHEN OUR CONSUMER BUSINESS BE FAST, EFFICIENT AND EFFECTIVE INVEST FOR FUTURE GROWTH 9

12 Our 30 Year Vision Staged and Affordable Capacity for growth to 2044 and beyond 10

13 Regulatory Environment Dual-till regime under the Commerce Act 1986 with information disclosure regulation. Aeronautical till: faces limited competition and therefore is subject to disclosure regulation. Non-aeronautical till: open market competitive forces. Airport Authorities Act 1966 provides for and requires: Airports to set charges. Consult on aeronautical charges at least every five years. Consult on capex decisions exceeding 20% of aeronautical asset base. New disclosure regime includes monitoring of service standards, asset availability, capital expenditure plans, efficiency of pricing and return on investment. New Zealand Commerce Commission provides monitoring of the information disclosure regulatory regime. Merits appeal outcome has not impacted Auckland Airport s 56G report as the outcome would likely bring the Commission s estimate of Auckland Airport s target returns further within the range of acceptable returns 1. Appeal has also resulted in the Commission announcing its intention to do further work on whether it should amend the 75th WACC percentile for regulated industries. 1. Source: Commerce Commission letter to Minister of Transport re Final s56g Commerce Act report Christchurch Airport, 13 February 2014 at [8]. 11

14 A performance update Auckland International Airport Limited (Parent) Net profit after tax of $183.6 million for year to 30 June 2013 (up 28.4% from 2012). Underlying profit of $160.9 million for the year to 30 June 2013 (up 12.7% from 2012). Passenger growth has continued at Auckland Airport 5.0% international passenger growth, 3.2% domestic passenger growth in the financial year to date at March Our vision for the next 30 years was released showing a stageable, affordable and flexable pathway for growth 1. Best Airport in Australia Pacific for the 6 th year in a row in Skytrax See Skytrax awards announcement 27 March

15 Five year results overview Auckland International Airport Limited (Parent only) 30 June 2013 $ June 2012 $ June 2011 $ June 2010 $ June 2009 $ 000 Revenue 469, , , , ,313 Expenses 117, ,537 99,526 86,802 88,881 Earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) 351, , , , ,432 Gain on sale of associates - - 1, Plant, property and equipment revaluation - - (63,465) - - Investment property fair value increase/ (decrease) 23,091 1,350 21,640 9,469 (64,586) Derivative fair value increase / (decrease) 1,473 (2,148) 3, Share of profit of associates Costs relating to ownership proposals Earnings before interest expense, taxation and depreciation (EBITDA) 376, , , , ,795 Depreciation 62,053 64,483 56,843 55,736 54,766 Interest expense and other financial costs 66,689 68,958 70,417 71,938 75,590 Taxation expense 63,763 55,313 42, ,366 43,696 Reported net profit after taxation 183, , ,715 34,817 41,743 Underlying profit 160, , , , ,035 Capital expenditure 93,471 83,141 74,774 54,290 87,593 13

16 Capital Return Rationale Auckland Airport has been reinvesting surplus cash flows in the business to drive growth. This investment and strong execution has significantly improved profitability over the last five years. Key credit metrics have strengthened beyond historic levels. In effect shareholders held a significantly higher proportion of the Company s funding. Capital return of $454m was paid on 14 April. $280m bridge facilities drawn to provide initial funding. Three year $150m floating rate bonds issued to reduce the initial bridge funding. Seven year $150m fixed rate bond will be used to partially repay bridge facilities. Other long term funding plans are underway. 14

17 Auckland Airport borrowings Auckland Airport currently utilises a mixture of NZ DCM term bonds, bank facilities, USPP notes, commercial paper and money market facilities. As at 30 April 2014, Auckland Airport had: $1.519 billion total drawn debt. $336.6 million committed but undrawn facilities. Average interest rate for FY14 = 6.0% Bond programme supported by a master trust deed. 15

18 Auckland Airport borrowings The BNZ multi currency facility and the CBA multi currency bank facility both support the commercial paper programme (current balance of $ million as at 30 April 2014) through the availability of same-day draw-downs and provide liquidity backing for general working capital. As the commercial paper is supported by the bank facilities the debt maturity profile chart as at 30 April 2014 includes the commercial paper in the less than one year and three to four year brackets, matching the maturities of the supporting facilities. 16

19 Passenger Volume Growth and Volatility FY02 FY13 CAGR AIAL International 3.7% Domestic 5.9% Total 4.6% Standard Deviation International 4.5% Domestic 5.3% Total 4.0% Coefficient of Variation

20 Key credit metrics Auckland International Airport Limited (Parent only) 30 June June June June June 2009 S&P Long-term credit rating A- (Positive) A- (Stable) A- (Stable) A- (Stable) A- (Stable) FFO / average net debt (%) FFO interest cover Total Borrowings ($m) 1, , , , ,076.7 Fixed Borrowings (after swaps) (%) Debt/Debt + equity (%) Debt/EBITDAFI (times) EBITDAFI interest cover (times) Credit metrics strong. Following the Auckland Airport 2012 annual results including the announcement of increased dividend policy, Standard & Poor's confirmed its rating of Auckland Airport at A- and upgraded its outlook to Positive (from Stable). Following the announcement of the capital return, S&P affirmed Auckland Airport s issuer rating of A- and revised the outlook to Stable. S&P also assessed Auckland Airport s anchor rating as a flat. 18

21 How to Find Out More Auckland International Airport Limited First Floor 4 Leonard Isitt Drive Auckland Airport Manukau 2022 Telephone: ANZ Bank New Zealand Limited Level 7, 1 Victoria Street Wellington 6012 Telephone: Deutsche Craigs Limited Level 36 Vero Centre 48 Shortland Street Auckland 1010 Telephone: Forsyth Barr Limited Level 9 Forsyth Barr House The Octagon Dunedin 9016 Telephone:

22

23 AUCKLAND INTERNATIONAL AIRPORT LIMITED Terms Sheet: Seven Year Fixed Rate Bonds 14 May 2014.

24 Terms Sheet This Terms Sheet is prepared in respect of an offer by Auckland International Airport Limited (Auckland Airport) of up to NZ$150,000,000 of fixed rate bonds (Bonds) under its master trust deed dated 9 July 2004 (as amended on 1 June 2012) as modified and supplemented by the supplemental deed dated 14 May 2014 entered into between Auckland Airport and The New Zealand Guardian Trust Company Limited (Trustee) (together, Trust Documents). The offer of Bonds is being made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). Except for the interest rate and maturity date, the Bonds will have identical rights, privileges, limitations and conditions as Auckland Airport s NZ$100,000,000 fixed rate bonds maturing on 13 December 2019 which are quoted on the NZX Debt Market under the ticker code AIA120 (AIA120 Bonds), and therefore are of the same class as the AIA120 Bonds for the purposes of the FMCA and the Financial Markets Conduct (Phase 1) Regulations 2014 (FMC Regulations). ISSUER DESCRIPTION OF BONDS PURPOSE LEAD MANAGER AND ORGANISING PARTICIPANT CO-MANAGERS Auckland International Airport Limited Direct, unsecured, unsubordinated, fixed rate debt obligations of Auckland Airport ranking equally and without preference among themselves and equally with all other outstanding unsecured and unsubordinated indebtedness of Auckland Airport (except indebtedness preferred by law). General corporate purposes and refinancing of the April 2014 capital return to shareholders. ANZ Bank New Zealand Limited Deutsche Craigs Limited and Forsyth Barr Limited CREDIT RATINGS Expected Long-Term Issue Credit Rating Long-Term Issuer Credit Rating Standard & Poor s A- A- Further information about Standard & Poor s credit rating scale is available at A credit rating is not a recommendation to invest in the Bonds and may be subject to revision, suspension or withdrawal at any time. ISSUE AMOUNT Up to NZ$150,000,000 OPENING DATE Tuesday, 20 May 2014 CLOSING DATE 11.00am on Friday 23 May 2014 RATE SET DATE Friday, 23 May 2014 ISSUE DATE Wednesday, 28 May 2014 TENOR 7 years MATURITY DATE Friday, 28 May 2021 INTEREST RATE BASE RATE The aggregate of the Base Rate and the Margin on the Rate Set Date. The Interest Rate will be announced by Auckland Airport via NZX on or shortly after the Rate Set Date, and may be obtained from Auckland Airport or the Lead Manager. The Interest Rate will not change after the Rate Set Date. The semi-annual mid-market swap rate for an interest rate swap of a term matching the period from the Issue Date to the Maturity Date as calculated by the Lead Manager in accordance with market convention with reference to Reuters page ICAPAUKIWISWAP on the Rate Set Date and expressed on a semi-annual basis, rounded to 2 decimal places, if necessary with being rounded up.

25 INDICATIVE MARGIN AND ACTUAL MARGIN INTEREST PAYMENT DATES The indicative Margin for the Bonds is 0.90 percent per annum. The actual Margin for the Bonds will be set by Auckland Airport (in consultation with the Lead Manager) on the Rate Set Date following a bookbuild by the Lead Manager. The actual Margin will be announced by Auckland Airport via NZX on or shortly after the Rate Set Date. 28 May and 28 November in each year until and including the Maturity Date. FIRST INTEREST PAYMENT DATE 28 November 2014 FREQUENCY OF INTEREST PAYMENTS ISSUE PRICE MINIMUM APPLICATION AMOUNT AND MINIMUM HOLDING RECORD DATE BUSINESS DAY QUOTATION EXPECTED DATE OF INITIAL QUOTATION AND TRADING ON THE NZX DEBT MARKET REGISTRAR ISIN REPO-ELIGIBILITY EARLY REPAYMENT GOVERNING LAW Semi-annually (half annual amount) in arrears on each Interest Payment Date. If an Interest Payment Date falls on a day that is not a Business Day, the relevant payment will be made on the next day which is a Business Day, without adjustment, interest or further payment as a result thereof. Par (NZ$1.00 per Bond, being the Principal Amount of each Bond) The minimum application and holding amount in respect of the Bonds is NZ$10,000 and multiples of NZ$1,000 thereafter. 10 calendar days before an Interest Payment Date or, if not a Business Day, the immediately preceding Business Day. A day (other than a Saturday or Sunday) on which registered banks are generally open for business in Wellington and Auckland. NZX Debt Market (Ticker Code: AIA130). Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of this Terms Sheet have been duly complied with. However, the Bonds have not yet been approved for trading and NZX accepts no responsibility for any statement in this Terms Sheet. NZX is a registered exchange, and the NZX Debt Market is a registered market under the Securities Markets Act It is expected that quotation on the NZX Debt Market will occur on Thursday 29 May 2014, and in any event not later than 5 Business Days after the Closing Date. Link Market Services Limited NZAIADT130L1 Auckland Airport intends to apply to the Reserve Bank of New Zealand for the Bonds to be included as eligible securities for domestic market operations. In the case of an event of default as set out in the Trust Documents, which is continuing unremedied, the Trustee may declare, and may be directed by bondholders to declare, the principal amount and accrued interest on the Bonds to be immediately due and payable. New Zealand

26 WHO MAY APPLY NZX WAIVERS There is no public pool for the Offer, with 100% of the Bonds reserved for clients of the Lead Manager and Co-Managers, institutional investors and other market participants. Investors wishing to purchase the Bonds should contact their broker. Each investor s broker will be able to advise them as to what arrangements will need to be put in place for the investors to trade the Bonds including obtaining a common shareholder number (CSN), an authorisation code and opening an account with a primary market participant as well as the costs and timeframes for putting such arrangements in place. Any allotment of Bonds will be at Auckland Airport s discretion, in consultation with the Lead Manager. Auckland Airport reserves the right to refuse to make any allotment (or part thereof) without giving any reason. NZX has granted Auckland Airport a waiver from NZX Listing Rule , to enable Auckland Airport to decline to accept or register a transfer of Bonds if such transfer would result in the transferor holding or continuing to hold Bonds with a principal amount of less than the applicable minimum principal amount (or minimum multiple thereof). The effect of the waiver from NZX Listing Rule is that the minimum holding amount in respect of the Bonds will be Bonds with an aggregate principal amount of not less than NZ$10,000 and multiples of $1,000 over the minimum holding amount. Auckland Airport may refuse a transfer if the transfer is not in multiples of $1,000. NZX has also granted Auckland Airport a waiver from NZX Listing Rule to enable Auckland Airport to apply for quotation on the NZX Debt Market even though the Bonds may not initially be held by at least 500 members of the public holding at least 25% of the Bonds issued. The waiver has been granted for a period of one year from the quotation date of the Bonds. The effect of the waiver from NZX Listing Rule is that initially the Bonds may not be widely held and there may be reduced liquidity in the Bonds. NZX has granted Auckland Airport waivers from: (a) the requirement in NZX Listing Rule 7.1.5(c) that this terms sheet must contain, in its subscription application, a field for subscribers to insert their CSN number, as there is no subscription application form for this offer; and (b) NZX Listing Rule such that this terms sheet is not required to contain certain statements in relation to the refund of any subscription moneys to applicants for the Bonds to whom allotments are not made. Such statements are not applicable as investors will be purchasing the Bonds on the secondary market through their brokers.

27 SELLING RESTRICTIONS The Bonds may only be offered for sale or sold in New Zealand in conformity with all applicable laws and regulations in New Zealand. No Bonds may be offered for sale or sold in any other country or jurisdiction except in conformity with all applicable laws and regulations of that country or jurisdiction. No offering document or other offering material in respect of the Bonds may be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations in that country or jurisdiction. No action has been or will be taken by the Issuer which would permit an offer of Bonds to the public, or possession or distribution of any offering material, in any country or jurisdiction where action for that purpose is required (other than New Zealand). By purchasing the Bonds, each bondholder is deemed to have indemnified the Issuer, the Lead Manager and Organising Participant, the Co-Managers and the Trustee for any loss suffered by any of them by reason of any breach of the selling restrictions. The dates set out in this Terms Sheet are indicative only and are subject to change. Auckland Airport has the right in its absolute discretion and without notice to close the offer early, to extend the Closing Date, or to choose not to proceed with the offer. If the Closing Date is extended, subsequent dates may be extended accordingly. Copies of the Trust Documents will be made available by Auckland Airport for inspection during usual business hours by any bondholder at the office of Auckland Airport at the address below (or such office as Auckland Airport may notify the bondholders from time to time). For further information regarding Auckland Airport, visit Address details Auckland International Airport Limited First Floor 4 Leonard Isitt Drive Auckland Airport Manukau 2022 ANZ Bank New Zealand Limited Level 7, 1 Victoria Street Wellington 6012 Telephone: Deutsche Craigs Limited Level 36 Vero Centre 48 Shortland Street Auckland 1010 Telephone: Forsyth Barr Limited Level 9, Forsyth Barr House The Octagon Dunedin 9016 Telephone: