Santos, the shareholder in two Australian liquefied natural gas LNG export plants and in Papua New Guinea LNG, has priced a US$600 million fixed-rate bond and said the transaction was many times over-subscribed with demand from global financial institutions.
The bonds have been priced at a fixed coupon of 5.25 percent for a period of 10 years and maturing on 13 March 2029. The bonds will be guaranteed by Adelaide-based parent company Santos Ltd.
“The book was approximately five times over-subscribed and received strong support from a mix of global asset managers and insurance companies from Asia, Australia and Europe,” said Santos.
The use of the proceeds from the bonds will include refinancing the US$500M bridging facility used to partly-fund the acquisition by Santos of Western Australian natural gas and oil company Quadrant Energy and for general corporate purposes.
Santos Chief Executive Kevin Gallagher said the offering was consistent with the company’s strategy of securing competitively priced long-term capital.
“This is an excellent result for Santos, showing strong support from the capital markets and demonstrating our balance sheet is set up to support our growth strategy,” added the CEO.
He explained that the bond would replace an existing two-year bridging facility and would mean that all significant near-term debt maturities have been addressed with more efficient long-term debt funding.
Santos is operator of the Gladstone LNG plant in Queensland and whose other shareholders are Petronas of Malaysia, Korea Gas Corp. and French major Total.
The company also holds a stake in Darwin LNG, operated by ConocoPhillips, and in the ExxonMobil-led PNG LNG plant and its expansion project.
Santos said joint lead managers of the transaction were Australia and New Zealand Banking Group ANZ, Citigroup Inc. of the US and Commonwealth Bank of Australia.
