Brisbane-based Prime Infrastructure, which owns Powerco, told the ASX yesterday that Standard & Poor’s had affirmed its BBB/A2 corporate credit rating for Powerco, removing the company from the CreditWatch it was placed on following the announcement last August of Prime’s proposed takeover of Powerco.

The corporate credit rating followed implementation of agreed ring-fencing measures and results in the achievement of a strong investment grade rating, as envisaged by Prime Infrastructure at the time of its Powerco acquisition.

Meanwhile, Powerco’s NZ$100 million capital bonds, which have an interest rate of 7.64% for five years, closes on April 14, with the unsecured subordinated bonds to be issued the next day. Standard & Poor’s has rated those bonds BBB.

The proceeds of this issue are intended to be used to repurchase the NZ$100 million of Powerco capital bonds which, following the November completion of the Powerco takeover, were held by Prime Infrastructure Networks (New Zealand).

Following repurchase by Powerco, those capital bonds will be cancelled, enabling PINNZ to repay a commensurate portion of the acquisition financing.

The new bond issue and confirmation of credit rating followed the issuing in February of NZ$75 million of Prime Infrastructure NZ SPARCS to institutions.

Prime Infrastructure Management managing director Chris Chapman said these initiatives were important components of a programme designed to provide the most efficient capital structure for Prime in relation to the Powerco acquisition.

“The net result of these three initiatives is that Prime’s balance sheet, post the Powerco acquisition, reflects an efficient capital structure that optimises the cost of capital,” Chapman said.