Mighty River Power confirms $250 million Capital Bond offer

NEWS RELEASE

6 June 2014

Mighty River Power confirms $250 million Capital Bond offer

Mighty River Power has today confirmed an offer to the New Zealand public of up to $250 million of unsecured subordinated Capital Bonds, with an option to accept up to an additional $50 million of oversubscriptions.

Confirming the details of the offer, Chief Financial Officer William Meek said the Capital Bonds are expected to be quoted on the NZX Debt Market and have a BB+ issue credit rating from Standard & Poor’s. The Minimum Interest Rate for the first five years will be set following a bookbuild process and announced by the opening date of the offer, which is expected to be 18 June 2014. The Minimum Interest Rate is expected to be in the range of 6.8 – 7.0%.

In making this offer, the Mighty River Power board views the Capital Bonds as an ongoing and valuable component of the Company’s capital structure. The proceeds from the offer will be used for general corporate purposes including the repayment of bank debt and extending the average term of Mighty River Power’s funding profile.

The Capital Bonds have a maturity date of 11 July 2044 but may be redeemed by the Company from 11 July 2019 or earlier under certain circumstances. The Company expects Standard & Poor’s will assign intermediate equity content to the Capital Bonds – treating 50% of the principal and interest as equity for credit rating purposes – for up to 10 years.

Recognising that there would be demand from Mighty River Power shareholders and the public who may not have a broker relationship, Mr Meek said the offer would include a public pool with preference given to shareholders if scaling is required.

Applications for the Capital Bonds can only be made using the form included in the Simplified Disclosure Prospectus.

Interested investors should contact one of the Joint Lead Managers to the offer (listed below) or an Authorised Financial adviser to request a free copy of the Simplified Disclosure Prospectus. Alternatively the Simplified Disclosure Prospectus can be viewed on www.mrpcapitalbonds.co.nz.

Contact information for the Joint Lead Managers:

Forsyth Barr 0800 367 227
ANZ 0800 269 476
Deutsche Craigs 0800 226 263
Goldman Sachs 0800 555 555

The proposed issue of Capital Bonds does not require shareholder approval.

ENDS

As a listed company employing continuous disclosure practices, Mighty River Power was able, under the Securities Act and Regulations, to issue a Simplified Disclosure Prospectus, which includes the full details of the offer. All applicants need to complete the application form that accompanies the Simplified Disclosure Prospectus. Applications will not be accepted until the opening date for the offer. Applicants should read the whole of the Simplified Disclosure Prospectus before deciding whether to apply for the Capital Bonds.

Application has been made to NZX for permission to quote the Capital Bonds on the NZX Debt Market and all the relevant requirements of NZX that can be complied with on or before the date of this announcement have been complied with. NZX accepts no responsibility for any statement in this announcement. The NZX Debt Market is a registered market operated by NZX, which is a registered exchange and regulated under the Securities Markets Act 1988.

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