Australia's largest natural gas infrastructure company, APA Group, is selling US$1.4 billion of senior debt notes to help fund the purchase of a major Queensland gas pipe.
Gas pipeline giant APA Group has successfully arranged a massive US$3.7 billion of long-term debt finance over the last few days with the result that it will not be drawing down at all on the more expensive bridge financing put in place to fund its US$5 billion acquisition of BG Group's gas pipeline in Queensland.
APA said today that it had priced the senior secured notes in US debt capital markets in New York and will offer US$1.1 billion of 10 year notes at a fixed coupon rate of 4.2%, and US$300 million of 20 year notes at 5%.
The group will use the cash raised to complete the purchase of the QCLNG pipeline, which it acquired from BG group in December for more than AUS$6 billion.
The pipeline is a key component of the QCLNG project in Queensland, which links gas fields in the Surat Basin to the project’s LNG plant on Curtis Island.
APA will issue the notes under its wholly-owned APT Pipelines borrowing entity, which will be backed by Australian Pipeline Limited.
Chief Financial Officer Peter Fredricson, taking part in a roadshow in the US in the run-up to the issuance, said the company was pleased with "very strong interest" from debt investors attracted to APA's portfolio of long-life stable infrastructure assets.
Ratings agencies had already confirmed they expected to maintain their current ratings on APA on completion of the funding.
Edited from various sources by Elizabeth Corner
Sources: Herald Sun, Australian Financial Review