US investors place chips with SkyCity

Evan Davies says the US$400 million fund raising represents a large issue into the US debt market by any standards. Picture / Brett Phibbs

Less than a week before its half-year result is due, SkyCity has successfully raised US$400 million ($560 million) through a private placement to United States-based investors.

Managing director Evan Davies said the money would be used to replace existing senior bank debt and lengthen the company's debt maturity profile. "We're not buying anything," he said.

It was a large issue into the US debt market by New Zealand standards.

"Well actually by any standards," Davies said.

The placement, which was increased from an initial offering of US$150 million to US$400 million, was almost three times oversubscribed.

Thirteen investors took part, including US, New Zealand and Australian institutions, with the dominant interest coming from the US (15 per cent of SkyCity's shares are held by non-Australasian parties).

The Skycity announcement said that the deal was the first US private placement by an unrated New Zealand company and the first to include a foreign currency placement.

The New Zealand currency component was also the first ever placement in kiwi dollars made in the US private placement market.

Managed by Deutsche Bank, it features three currencies across four maturities.

SkyCity announces its interim result on Monday and analysts are expecting it to fall in the $116 million to $119 million range flagged at October's annual meeting.

Is it expected to be too early to reveal the impact of the December 10 smoking ban and changes to the regulations governing gambling.

ABN Amro head of research James Miller said the focus would be on the Auckland casino - "the engine of the business" - including the performance of the convention centre addition and of SkyCity's Darwin operations.

"While we are reasonably confident that SkyCity will come in on target, the commentary, full-year guidance and the Q&A session may trigger some market reaction."

Sky City shares closed down 2c at $5.13 yesterday.