Mighty River deals with debt

By CHRIS DANIELS

State-owned energy company Mighty River Power has released details of a $200 million bond issue.

The 10-year fixed-rate bonds will be issued to help restructure Mighty River's debt, which is weighted heavily towards short-term bank loans.

Raising money through bonds would reduce refinancing risks through lengthening the maturity of debt and fund sources would be diversified, meaning less reliance on banks.

Chief executive Doug Heffernan said the company was still focused on New Zealand, and did not envisage any large-scale expansion in the next few years.

It did have plans for expanding its geothermal power generation.

Mighty River generates 15 per cent of New Zealand's electricity, mainly through its power stations on the Waikato River.

It also has 15 per cent of the New Zealand residential market, through its Mercury Energy brand.

Minimum subscription for the bonds will be $5000. A $15 million pool will be put aside for Mercury Energy customers.

Interest will be paid quarterly, in arrears. Mighty River has the right to repay the bonds after five years.

The interest rate will be set on April 14, with the offer opening the next day. The offer will close on May 7.