Ampol Limited has commenced a fully underwritten wholesale offering of A$150 million of hybrid subordinated notes which fall due in 2082.
In a statement the company said the proposed issue forms part of Ampol’s ongoing capital management strategy and follows the successful issue of A$500 million of subordinated notes in December 2021.
The new issue will have a first optional redemption date in 2028 and will be non-fungible with Ampol’s existing subordinated notes.
Ampol says the net proceeds of the issue will be used for general corporate purposes.
Some of the key terms of the subordinated notes offer include:
- 60-year maturity
- interest payable quarterly at a floating rate of 3 month BBSW plus a margin of 3.80% per annum, subject to certain deferral rights;
- subordinated to Ampol’s senior debt and pari passu with Ampol’s outstanding subordinated notes;
- redeemable with cash by Ampol in June 2028 and on subsequent interest payment dates, with the redemption price set at par or 101%, depending on the company’s performance against certain sustainability performance targets (SPTs);
- if Ampol decides not to redeem in June 2028 or in future periods, holders have an option to convert their Subordinated Notes into Ampol ordinary shares on the first call date and approximately every two years thereafter. The number of shares will be determined on the basis of the then prevailing VWAP less a discount of 1% or 2%, depending on the company’s performance against the SPTs; and
- the SPTs comprise reductions in scope 1 and 2 operational emissions intensity in the Fuels & Infrastructure business of 5% and reductions in scope 1 and 2 operational emissions on an absolute basis in the Convenience Retail business of 25% against baseline levels by June 2025, and the operation or control of at least 500 AmpCharge or equivalent electric vehicle charge points by December 2027.
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The notes are expected to receive 50% equity credit from Moody’s Investors Service, providing support to Ampol’s credit rating.
The notes include an innovative sustainability feature, whereby the redemption price (or conversion price) payable by Ampol is directly linked to key elements of the company’s Future Energy and Decarbonisation Strategy. In particular, Ampol’s goal to reduce carbon emissions in its Fuels & Infrastructure and Convenience Retail businesses by 2025, and a new goal to operate or control at least 500 AmpCharge or equivalent electric vehicle charge points by 2027.
The proposed issue will be the second sustainable financing initiative completed by Ampol, following the establishment of a sustainability-linked loan in 2021.
Greg Barnes, Group Chief Financial Officer, said: “We’re delighted to announce this new sustainability-linked hybrid issue, which we understand is the first of its kind in global markets.
“The transaction supports our capital management strategy and reinforces our commitment to Ampol’s Future Energy and Decarbonisation Strategy.
“The issue provides further funding diversification and incremental balance sheet capacity.”
Barrenjoey Markets Pty is acting as sole structuring adviser, lead manager and underwriter for the proposed issue.
