Early redemption of capital notes

HELLABY HOLDINGS LIMITED – NZX / Media Release: 11 October 2010

Hellaby announces early redemption of capital notes

Investment company Hellaby Holdings Limited today advised that it intends to further enhance its capital structure, following the company’s successful equity capital raising last month.

The company will make an early cash redemption of the $50 million capital notes issued in 2006 which were due to mature in June 2011. Early cash redemption is permitted under the company’s Trust Deed.

Hellaby Chief Financial Officer Richard Jolly said that the company had decided to redeem the capital notes early to take advantage of lower interest rates available through its core bank debt. “The stated objectives of our equity raise were to adopt a more conservative capital structure, to increase financial flexibility and to position ourselves for future growth and improved profitability.

We believe that this initiative is consistent with those objectives. Whilst we are currently in a position to lower the company’s overall interest cost through our banking facilities, our debt gearing levels still give us the capacity to fund future growth opportunities,” Mr Jolly said.

The capital notes, which pay a fixed coupon rate of 8.50% per annum, quarterly in arrears, currently have a maturity date of 15 June 2011.

In accordance with the provisions of Hellaby’s Capital Notes Master Trust Deed and Supplemental Trust Deed dated 17 May 2006, the company intends to redeem its 50 million issued Series One Capital Notes in full on 15 December 2010.

Noteholders will be paid 100% of face value ($1.00) plus accrued interest for each capital note on the next scheduled quarterly coupon payment date, 15 December 2010.

The record date by reference to which the company exercises its option will be 5:00 pm on 3 December 2010. Noteholders will be issued a call option notice later this month advising them of the early redemption to take place on 15 December 2010.

ENDS

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