Air New Zealand (NZ, Auckland International) is offering institutional investors and selected New Zealand-based retail investors the opportunity to participate in a NZD75 million New Zealand dollar (USD42.7 million) bond offering. The unsecured and unsubordinated fixed-rate bonds will mature on April 27, 2028. The airline adds that it has the ability to accept an additional NZD25 million (USD14.2 million) in oversubscriptions at its discretion.

"The offer opens today (October 17) and will close on Thursday, 20 October 2022. The offer is made pursuant to clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 as an offer of debt securities of the same class as Air New Zealand’s NZD50 million (USD28.5 million) unsecured, unsubordinated, fixed-rate bonds maturing on 28 October 2022," the airline's October 17 filing to the New Zealand Stock Exchange (NSX) says.

ANZ Bank New Zealand Limited, Jarden Securities Limited, Forsyth Barr Limited, and Westpac Banking Corporation (acting through its New Zealand branch) are joint deal managers on the offering which is reserved for clients of the four lead managers, institutional investors, and invited primary market participants.

"As part of Air New Zealand’s post-Covid strategy, the airline is focussed on continuing to have a diverse range of debt sources. As a proudly New Zealand company the airline feels it is important for the company to support the New Zealand capital markets," an earlier September NSX filing noted.

Air New Zealand says the bond's fixed-interest rate will comprise a margin and a base rate, subject to a minimum interest rate of 6.0% per annum. The airline notes that the current indicative margin range is 1.50% to 1.65% per annum.

"The margin and interest rate for the Bonds will be set following a bookbuild process, which is expected to be completed on Thursday, 20 October 2022," the filing says.

New Zealand's national carrier is presently enjoying strong forward sales into 2023 and is operating at around 70% of its 2019 capacity. Figuring on an average jet fuel price of approximately USD130/bbl, Air New Zealand is forecasting its earnings before taxes and other significant items in the second half of 2022 to be in the vicinity of NZD200 million (USD113.7 million) to NZD275 million (USD156.6 million).