Ann: WAV/RULE: AIA: AIA - Waivers from NZDX Listi

• Release Date: 30/11/12 16:49
• Summary: WAV/RULE: AIA: AIA - Waivers from NZDX Listing Rules
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AIA
30/11/2012 14:49
WAV/RULE

REL: 1449 HRS Auckland International Airport Limited

WAV/RULE: AIA: AIA - Waivers from NZDX Listing Rules

28 November 2012

NZX Regulation Decision
Auckland International Airport Limited
 Application for Waivers from NZDX Listing Rules 5.2.3, 7.1.10 and 11.1.1

Background

1. Auckland International Airport Limited ("AIA") is a Listed Issuer with
ordinary shares Quoted on the NZX Main Board and bonds Quoted on the NZX Debt
Market.

2. AIA intends to make an offer of $100 million of fixed rate bonds with a
term of seven years to be Quoted on the NZX Debt Market ("Bonds"). The Bonds
will be offered pursuant to a prospectus to be registered on or about 30
November 2012 ("Prospectus"), an Investment Statement and a Final Terms
Sheet.

3. The terms and conditions of the Bonds are contained in a master trust deed
dated 9 July 2004 (as amended by an amendment deed dated 1 June 2012)
("Master Trust Deed"), and a supplemental trust deed relating to the Bonds
(together, the "Trust Documents").

Application One - Waiver from Rule 5.2.3

4. AIA has applied to NZX Regulation ("NZXR") seeking a waiver from NZDX
Listing Rule ("Rule") 5.2.3, which requires a Class of Securities to be held
by at least 500 Members of the Public holding at least 25% of the number of
Securities of that Class issued, with each Member of the Public holding at
least a Minimum Holding ("Spread Requirements").

5. In support of its application, AIA submits that:

(a) Although the Bonds will be offered to retail subscribers through brokers
participating in the book build, it is expected that demand for the Bonds
will predominantly come from institutional investors, due to the likely
interest rate, which will result in a smaller spread of the Bonds at the time
of allotment;

(b) AIA anticipates that, consistent with its other bond issues, there will
be strong investor demand for the Bonds over time, leading to a degree of
liquidity in the secondary market and an increase in the spread of the Bonds
over time;

(c) Debt securities are not subject to the same degree of trading activity as
equity securities;

(d) If a waiver is granted, AIA will disclose the existence of the waiver in
the Prospectus and Investment Statement for the offer of the Bonds. This will
ensure that prospective Bondholders are aware that the Bonds are unlikely to
meet the Spread Requirements and that, as a result, the Bonds may have
reduced liquidity; and

(e) NZXR has previously granted waivers from Rule 5.2.3 with respect to
offers of Debt Securities, including to AIA in respect of its bonds
previously issued, notably:

(i) AIA - NZXR decision dated 9 July 2004;

(ii) AIA - NZXR decision dated 14 October 2005; and

(iii) AIA - NZXR decision dated 16 March 2007.

Application One - Rule

6. Rule 5.2.3 provides:

 "A Class of Securities will generally not be considered for Quotation on the
NZSX or NZDX unless those Securities are held by at least 500 Members of the
Public holding at least 25% of the number of Securities of that Class issued,
with each Member of the Public holding at least a Minimum Holding, and those
requirements are maintained, or NZX is otherwise satisfied that the Issuer
will maintain a spread of Security holders which is sufficient to ensure that
there is a sufficiently liquid market in the Class of Securities."

7. The footnote to Rule 5.2.3 provides:

  "NZX will readily consider a waiver from the requirements of Rule 5.2.3:

  (a) in the case of Debt Securities or Convertible Equity Securities if NZX
is satisfied that the lack of initial liquidity would not be of disadvantage
to holders... ."

Application One - Decision

8. On the basis that the information provided by AIA is complete and accurate
in all material respects, and subject to the conditions in paragraph 9, NZXR
grants AIA a waiver from Rule 5.2.3 for a period of one year from the
Quotation date of the Bonds.

9. The waiver contained in paragraph 8 is granted on the following
conditions:

(a) AIA must clearly and prominently disclose this waiver decision and its
implications in the offer documents relating to the offer of the Bonds;

(b) AIA must disclose liquidity as a risk in the Prospectus; and

(c) The waiver, its conditions and its effect must be disclosed in the annual
report for the year that the waiver is relied upon.

Application One - Reasons

10. In coming to the decision to grant AIA a waiver from Rule 5.2.3, NZXR has
considered the following matters:

(a) The conditions in paragraph 9 above will ensure that prospective
Bondholders are aware that the Bonds may not satisfy the Spread Requirements
and that, as a result, the Bonds may have reduced liquidity;

(b) Debt securities are not subject to the same degree of trading activity as
equity securities; and

(d) there is precedent for temporary waivers being granted in the past in
similar circumstances.

Application Two - Waiver from Rule 7.1.10

11. AIA has applied to NZXR seeking a waiver from Rule 7.1.10, so that it may
require applications for Bonds to be submitted only to the Lead Manager.

12.  In support of its application, AIA submits that:

(a) All of the Bonds will be reserved for subscription by selected persons
participating in the book build or retail clients who have received an
allocation from a broker and there will be no general public pool;

(b) AIA has indicated that in the context of a standard broker firm
allocation process, applicants need to return their completed application to
the broker who provided the firm allocation. Due to the timetable for the
proposed offering being relatively short, brokers will also need to settle
applications for the Bonds directly via the Lead Manager;

(c) The arrangements for application and settlement of the Bonds will be
disclosed in the Investment Statement and Prospectus;

(d) The rationale for the non-application of Rule 7.1.10 in relation to an
IPO (where the broker firm allocation process is typically used) is equally
applicable for the mode used in offering the Bonds; and

(e) NZXR has previously granted waivers from Rule 7.1.10 in respect of issues
of debt securities, most recently to Transpower New Zealand Limited in a
decision dated 28 February 2012.

Application Two - Rules

15.  Rule 7.1.10 provides:

"Every Offering Document, after stating that applications may be made to the
Issuer, shall state that they may be lodged with any Primary Market
Participant, the Organising Participant or any other channel approved by NZX
(in that order) in time to enable forwarding to the appropriate place prior
to the application closing date."

Application Two - Decision

16. On the basis that the information provided to NZXR is full and accurate
in all material respects, NZXR grants AIA a waiver from Rule 7.1.10, so that
it may require applications for Bonds to be submitted only to the Lead
Manager.

Application Two - Reasons

17.  In coming to the decision to grant a waiver from Rule 7.1.10, NZXR has
considered that:

(a) The notification of the ability to lodge applications in respect of the
offer with Primary Market Participants, Organising Participants and other
equivalent channels approved by NZX is not necessary in this case. As there
is no general public pool, it would be unduly burdensome to allow Bond
applications to be made to brokers who have not participated in the book
build process;

(b) The Investment Statement clearly discloses where applications may be
lodged; and

(c) There is precedent for this decision in a recent NZXR waiver granted to
Transpower New Zealand Limited in a decision dated 28 February 2012.

Application Three - Waiver from Rule 11.1.1

18. AIA has also applied to NZXR seeking a waiver from Rule 11.1.1, in
relation to the Bonds, as well as future series of bonds to be constituted
under the Master Trust Deed and subsequent supplemental trust deeds, so that
it may refuse a transfer if the transfer is not in multiples of $1,000, or
would result in the transferor holding an aggregate principal amount of less
than $10,000 of the relevant series of bonds (if not zero) (the "Transfer
Restrictions").

19. In support of its application, AIA submits that:

(a) It would be unduly burdensome for AIA to be required to allow holders of
bonds to hold a parcel of less than the minimum holding or to permit
transfers of less than $1,000 or multiples thereof as this is likely to
significantly increase its compliance costs;

(b) Minimum transfers of $1,000 is a commonly used threshold across all debt
securities and the Rules already allow a restriction on transfers where the
transferee would be left holding less than the minimum holding;

(c) The submissions above are expected to apply in relation to further
issuances of bonds under the Master Trust Deed and any subsequent
supplemental trust deeds, and will ensure consistency with all other series
of bonds on issue by AIA; and

(d) NZXR has previously granted waivers from Rule 11.1.1 in respect of issues
of debt securities by AIA, notably:

(i)   AIA - NZXR decision dated 14 October 2005;

(ii)  AIA - NZXR decision dated 16 March 2007;

(iv) AIA - NZXR decision dated 23 December 2008; and

(v) AIA - NZXR decision dated 29 October 2009.

Application Three - Rules

20. Rule 11.1.1 provides:

"Subject to the provisions of any legislation, and to Rules 11.1.4 and
11.1.5, no Issuer shall impose, in its Constitution or otherwise, any
restriction on the right of a holder of a Quoted Security to transfer that
Security, or any restriction upon registration of a properly completed
transfer of Quoted Securities."

Application Three - Decision

21. On the basis that the information provided to NZXR is full and accurate
in all material respects, and subject to the conditions in paragraph 22, NZXR
grants AIA a waiver from Rule 11.1.1 to allow it to include the Transfer
Restrictions in:

  (a) The terms of the Bonds; and

  (b) The terms of future series of bonds to be constituted under the Master
Trust Deed and subsequent supplemental trust deeds.

22. The waiver in paragraph 21 is granted on the condition that the waiver
and its implications and the transfer restrictions are clearly and
prominently disclosed in:

(a) The Prospectus and Investment Statement relating to the offer of the
Bonds; and

(b) The offer documents relating to the offer of further series of bonds
issued pursuant to the Master Trust Deed and in respect of which an
application for quotation on the NZX Debt Market has been made.

Application Three - Reasons

23. In coming to the decision to grant a waiver from Rule 11.1.1, NZXR has
considered that:

(a) NZXR will have the opportunity to review and approve the Prospectus and
Investment Statement relating to the Bonds (as well as the offer documents
relating to future bond issues for which an application for quotation on the
NZX Debt Market is sought). This will ensure that the level of disclosure to
prospective bondholders of the Transfer Restrictions is sufficient, that they
will be aware of the terms of the bonds and can therefore make informed
investment decisions;

(b) The restriction will alleviate the cost and administrative burden
incurred in situations where there are many holdings of a smaller size or
there is trading of bond holdings of less than $1,000;

(c) Granting a standing waiver in relation to future issuances of bonds under
the Master Trust Deed and subsequent supplemental trust deeds will ensure
that the Transfer Restrictions are consistent across all series of bonds on
issue by AIA; and

(d) There is precedent for this decision.

Confidentiality

24. AIA has requested that NZXR keep these waivers confidential until the
Prospectus is registered with the Registrar of Financial Service Providers.

25. In accordance with Footnote 1 to NZSX Listing Rule 1.11.2, NZXR grants
AIA's request.

ENDS.
End CA:00230514 For:AIA    Type:WAV/RULE   Time:2012-11-30 14:49:11