APN abandons US$250 mln 'junk bond' sale as investors baulk at terms
By Paul McBeth
Sept. 11 (BusinessDesk) - APN News & Media, the Australasian media group looking at spinning out its New Zealand unit, has dumped plans to raise US$250
million in a note offering from US investors and is looking at others ways to improve its financial flexibility.
The Sydney-based company won't go ahead with a senior unsecured note offer to sophisticated US investors despite
attracting significant interest, it said in a statement. APN planned to use to repay debt, diversify funding lines, and
extending debt maturities.
APN was assigned a sub-investment, or junk grade rating by the major three rating agencies after announcing the offer.
Standard & Poor's assigned APN a BB rating with stable outlook, Moody's Investors Service a Ba2 with negative outlook, and Fitch
Ratings a BB- on a stable outlook.
"While APN received significant investor interest in the proposed offering, this interest did not ultimately result in
terms and conditions satisfactory to the company," the company said. "APN will continue to explore capital market
opportunities that enhance the flexibility achieved in the recent refinancing."
The media group had already refinanced a new A$630 million banking facility in August, and plans an early redemption of
$100 million of NZX-listed bonds this month. APN's next major maturity is in January 2018.
APN is looking to split out its New Zealand unit for possible listing on the NZX, retaining a 40 percent stake in the
publisher of the New Zealand Herald newspaper and owner of The Radio Network.
An initial public offer of 60 percent of APN New Zealand would generate some A$308.6 million of gross proceeds, based on
the carrying value of the unit. Of that, some A$169.4 million would be raised through the float, and a further NZ$150
million from a 'note payable' as a result of restructuring the New Zealand unit, according to the offer document for the
note sale.
The funds raised would repay A$241.6 million of APN debt, and A$67.1 million would be added to the media group's cash
holdings.
APN's dual-listed shares fell 1.1 percent to 90 cents on the NZX, and last traded at 82 Australian cents.
(BusinessDesk)