AGL successfully prices $600 million bond issue

AGL Energy Limited (AGL), one of Australia's leading integrated energy companies and largest ASX listed owner, operator and developer of renewable energy, recently announced that it has successfully priced A$600 million of senior unsecured, seven year fixed rate medium term notes.

This is the largest seven year notes issue transaction in over a decade, and was more than four times oversubscribed from the initial launch volume of A$200 million with interest in excess of A$850 million primarily from Australian and Asian based investors.

The notes were issued at a spread of swap plus 170 basis points, equating to a 5.0% coupon.

AGL’s Chief Financial Officer, Brett Redman, said:

“As an inaugural A$MTN issuer this is an excellent outcome reflecting AGL’s strong credit metrics and current levels of market liquidity. We are pleased with the support and participation from a broad range of investors.

“This is also an important step in diversifying and lengthening AGL’s funding sources following the recent acquisition of the Macquarie Generation assets.”

The funds will be used to repay the $350 million Macquarie Generation debt bridge facility and to partly pre-pay AGL Loy Yang project finance debt due in November 2015.

In September 2014, AGL completed the $1,505 million acquisition of the Macquarie Generation (MacGen) assets from the NSW Government. The MacGen assets include the Bayswater and Liddell power stations.

AGL owns and operates AGL Loy Yang, which comprises the 2,210 megawatt Loy Yang A power station and the adjacent Loy Yang coal mine.