Skycity Raises Us$400m In Private Placement

15 February 2005

Skycity Raises Us$400m In Private Placement Increasing Financial Flexibility

SKYCITY has successfully raised US$400 million debt by way of a traditional private placement to US based investors. The primary objectives of the placement included increasing the company’s average debt maturity profile, diversifying its source of debt and providing increased financial flexibility. The funding from the placement will be applied to the repayment of existing senior bank debt and simultaneously broadens

SKYCITY’s finance sources and offers a reduction in currency-associated risk. This placement, which was increased from an initial offering of US$150 million to US$400 million, is equal to the largest US private placement ever undertaken by a New Zealand issuer. The transaction was close to three times oversubscribed.

SKYCITY’s placement is particularly noteworthy for its status as the first US private placement by an unrated New Zealand company and the first to include a foreign currency placement. The New Zealand currency component is the first ever NZ$ placement made in the US private placement market.

The placement, which is SKYCITY’s first, features three currencies across four maturities: 1) US$200.5 million of seven-year notes; 2) NZ$47.3 million of seven-year notes; 3) A$74.9 million of seven-year notes; 4) US$47 million of 10-year notes; 5) US$28.2 million of 10-year notes: 6) US$27 million of 12-year notes; 7) NZ$21.1 million of 15-year notes.

The tranches, which were all documented in the US, were also marketed in Australia and New Zealand. In total, 13 investors participated and included Trans-Tasman and US investors, with the dominant interest coming from the US. Managing Director of SKYCITY Entertainment Group, Evan Davies, said “the pricing reflects the fact that SKYCITY was viewed as a solid company by the investors. The excellent spreads and heavy oversubscription further reflects an optimistic view of SKYCITY’s underlying earnings potential and growth opportunities.”

The placement agent was Deutsche Bank.

ENDS

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