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- Release Date: 11/03/14 13:24
- Summary: WAV/RULE: AKC: AKC - Waiver from NZX Debt Market Listing Rule 5.2.3
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AKC
11/03/2014 11:24
WAV/RULE
REL: 1124 HRS Auckland Council
WAV/RULE: AKC: AKC - Waiver from NZX Debt Market Listing Rule 5.2.3
NZX Regulation Decision
Auckland Council ("AKC")
Application for waiver from NZX Debt Market Listing Rule 5.2.3
3 March 2014
Decision
1. Subject to the conditions in paragraph 2 below, and on the basis that the
information provided by Auckland Council ("AKC") is complete and accurate in
all material respects, NZX Regulation ("NZXR") grants AKC a waiver from NZX
Debt Market Listing Rule 5.2.3 ("Rule") in respect of the March Bonds for a
period of 12-months from the Quotation date for the March Bonds, to allow AKC
to have fewer than 500 Bondholders who are Members of the Public.
2. The waiver contained in paragraph 1 is granted on the following
conditions:
(a) AKC discloses liquidity as a risk in the Offering Document for the March
Bonds; and
(b) AKC clearly and prominently discloses this waiver, its conditions, and
its implications in its half-year and annual reports and in the Offering
Document relating to the March Bonds.
3. The information on which this decision is based is set out in Appendix One
to this decision. This decision will not apply if that information is not, or
ceases to be, full and accurate in all material respects.
4. Rule 5.2.3 is set out in Appendix Two to this decision.
Reasons
5. In coming to the decision to grant the waiver set out in paragraph 1
above, NZXR has considered that:
(a) Debt Securities are generally not subject to the same degree of trading
activity as Equity Securities;
(b) AKC has advised that it expects the spread of March Bonds will increase
to meet Spread Requirements over time;
(c) the condition, contained in paragraph 2(a) above, will ensure that
prospective Bondholders are aware that the March Bonds may not satisfy the
spread requirements of Rule 5.2.3;
(d) the 12-month waiver gives NZXR the opportunity to reconsider the spread
of the March Bonds in 12 months' time if AKC considers a waiver is still
required; and
(e) there is precedent for this decision.
Confidentiality
6. AKC has requested this application and any decision be kept confidential
until AKC has made an announcement regarding the offer of the March Bonds.
7. In accordance with Footnote 1 to Rule 1.11.2, NZXR grants AKC's request.
Appendix One
1. AKC is a Listed Issuer with bonds Quoted on the NZX Debt Market ("NZDX").
2. In 2012, AKC established a domestic bond programme under which it would
offer bonds as part of a series of bond offers ("Programme"). The initial
issuance of bonds under that Programme occurred in December 2012 and is
quoted on the NZDX under Ticker Code AKC060.
3. AKC now wishes to make a second issuance of bonds under the Programme, the
offer for which is expected to open during March 2014 ("March Bonds").
4. AKC expects that there will be between 20 to 100 Bondholders at the point
in time when the offer of March Bonds closes. Therefore, it is likely that
there will be fewer than 500 Bondholders on the allotment date. AKC expects
that some of the registered holders will be custodians which hold the March
Bonds for a larger number of underlying holders. AKC has indicated that it
considers the Spread Requirements will be met within 12 to 24 months of
Quotation.
Appendix Two
Rule 5.2 Quotation of Securities
5.2.3 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.
End CA:00248055 For:AKC Type:WAV/RULE Time:2014-03-11 11:24:02
