ORIGIN Energy has successfully priced a €1 billion hybrid capital issue which has been converted to A$1.4 billion, with the funds to be directed towards completing the company’s recent Browse basin acreage purchase.
Origin expects the hybrid will be awarded 50 per cent equity credit for ratings purposes from Standard & Poor’s and Moody’s, thereby supporting Origin’s current credit ratings.
Origin finance & strategy executive director Karen Moses said the company had historically enjoyed a strong level of support from investors across debt, hybrid and equity markets
“This is demonstrated by the successful issue of €800 million and US$800 million senior unsecured notes in October 2013, together with the successful pricing of this €1 billion hybrid,” she said.
“The issuance of these hybrid securities will complete Origin’s financing associated with the acquisition of interests in two exploration permits located in Western Australia’s prospective Browse basin.”
Additional funds raised will be used for general corporate purposes.
The hybrid, which has been hedged into Australian dollars, is subordinated and matures after 60 years.
It can be redeemed by Origin at years five and 10 or on any interest payment date thereafter.
The hybrid pays fixed semi-annual interest at a rate of 4% per annum for the first five years and thereafter at reset rates in accordance with the terms and conditions.
The settlement of the offering is expected to occur in mid-September and is subject to customary conditions.
UBS Limited acted as structuring advisor on the hybrid capital raising and Barclays Bank PLC, Goldman Sachs International and UBS Limited were joint lead managers.