On 9 November 2015 Australian Unity Limited (ASX Code: AYU) announced a new issue, Australian Unity Bonds - Series B (Prospective ASX Code: AYUHB). The size of the offer is indicated at $200 million but will change based on demand. The purpose of this transaction is to help fund the acquisition of Home Care Service NSW and help refinance the existing Australian Unity Notes (ASX Code: AYUHA).
The issuer (Australian Unity Limited) is a non-operating holding company and the majority of its assets are investments in subsidiaries of the Australian Unity Group. Most of the claims AYU has on each of its operating subsidiaries rank behind the operating company’s creditors. Therefore the issuer is a slightly higher risk than its regulated subsidiaries.
The bonds are structured as simple corporate bonds meaning they have no optionality and interest payments are mandatory. To qualify as a simple corporate bond this security has met specific legal eligibility requirements on the issuer and the security. The bonds are protected by event of default conditions which give the holder the right to recover any unpaid principal or interest subject to issuer solvency. Australian Executor Trustees Limited has been appointed as the trustee for holders of the bonds and they will act on behalf of the holders to enforce Australian Unity’s obligations to pay interest and principal in a full and timely manner.
The bonds pay a floating interest rate of 90-Day BBSW plus a margin (to be set at bookbuild but guided at [2.80- 2.90%] payable quarterly in arrears on 14 January, 14 April, 14 July and 14 October each year. The bond may only be redeemed on its legal final maturity date (15 December 2020) or when a Tax Event, Change of Control Event or a Clean Up Condition exists. Bond holders are protected by a series of covenants such as a negative pledge, restrictions of indebtedness and gearing covenants.
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Joint Lead Managers
- ANZ
- NAB
- Evans and Partners
Source: ASX and Australian Unity Limited
