Seven Group Holdings’s A$350 million convertible Notes offering


Herbert Smith Freehills has advised Seven Group Holdings (SGH) on its A$350 million convertible bond issue, which has given SGH greater diversity in its funding base, increased average duration given its seven year term and supported the refinancing of a legacy debt platform acquired with Coates Hire.

The bonds will be listed on SGX-ST in Singapore.

SGH is a leading Australian diversified operating and investment group with market leading businesses and investments in industrial services, oil and gas, and media.

While the convertible bond market has remained active offshore, this was the first significant deal of its type for three years by an Australian issuer. In issuing the convertible bond, SGH was able to leverage recent market volatility and the company’s strong performance.

This type of bond issue can be appealing to issuers because the option value in the conversion (even at a premium to current market price) results in a lower fixed cash coupon than would be payable on non-convertible debt.

The Herbert Smith Freehills team was led by partners Rebecca Maslen-Stannage (picture), Amy Geddes and Patrick Lowden, with senior associate Malika Chandrasegaran, Mark Dickinson, Mia Harrison-Kelf, Alison Wong and Greta Ulbrick.

Deutsche Bank acted as manager and underwriter and Bank of New York Mellon acted as trustee.

Involved fees earner: Rebecca Maslen-Stannage – Herbert Smith Freehills; Amy Geddes – Herbert Smith Freehills; Malika Chandrasegaran – Herbert Smith Freehills; Patrick Lowden – Herbert Smith Freehills; Mark Dickinson – Herbert Smith Freehills; Mia Harrison-Kelf – Herbert Smith Freehills; Alison Wong – Herbert Smith Freehills; Greta Ulbrick – Herbert Smith Freehills;

Law Firms: Herbert Smith Freehills;

Clients: Seven Group Holdings Limited (SGH, formerly Seven Network Limited);

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Author: Michael Patrini