Ann: WAV/RULE: TRP: TRP Waiver extension applicat

• Release Date: 02/08/13 17:44
• Summary: WAV/RULE: TRP: TRP Waiver extension application - NZDX Listing Rule 5.2.3
• Price Sensitive: No
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TRP
02/08/2013 15:44
WAV/RULE

REL: 1544 HRS Transpower New Zealand Limited

WAV/RULE: TRP: TRP Waiver extension application - NZDX Listing Rule 5.2.3

NZX Regulation Decision
Transpower New Zealand Limited
Application for extension of Waiver from NZDX Listing Rule 5.2.3

Background

Transpower New Zealand Limited ("TRP") is a listed Issuer with fixed rate
bonds Quoted on the NZX Debt Market ("NZDX").

TRP listed its $125,000,000 fixed rate bonds maturing on 30 November 2018 on
the NZDX on 29 February 2012 ("TRP010 Bonds"), and its $200,000,000 fixed
rate bonds maturing on 6 September 2019 on the NZDX on 7 September 2012
("TRP020 Bonds"). The bonds are quoted on the NZDX under the codes TRP010 and
TRP020 respectively.

NZDX Listing Rule ("Rule") 5.2.3 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").

On 17 August 2012, NZX Regulation ("NZXR") granted TRP a waiver from the
Spread Requirements in Rule 5.2.3 in respect of the TRP020 Bonds for a period
of one year from the Quotation date of the TRP020 Bonds, to allow the TRP020
Bonds to be held by fewer than 500 bondholders who are members of the public
("2012 Waiver").

Application for extension of Waiver from Rule 5.2.3

TRP has applied to NZXR seeking an extension of the 2012 Waiver from Rule
5.2.3 in respect of the TRP020 Bonds for a further 12 months from 7 September
2013.

In support of its application, TRP submits that:

TRP is of the view that, if in determining the spread of the TRP020 Bonds, it
could take into account the number of holders who hold the TRP020 Bonds
through nominees and custodians, it would meet the Spread Requirements.  It
is of the view that the spread of the TRP020 Bonds demonstrated by the
register of TRP020 Bonds does not reflect the actual spread of TRP020 Bonds.
TRP has advised that the spread of the TRP020 Bonds as at 12 July 2013 (based
on registered holdings) is 128 holders and that there has been an increase of
approximately 33% since the TRP020 Bonds were listed.

However, a number of the holders on the register are nominees and custodians.
 TRP has had discussions with one of its lead managers and it understands
that there are approximately 1100 underlying holders of the TRP020 Bonds held
by one custodian alone and that other nominees and custodians on the register
hold the TRP020 Bonds for a large number of underlying holders.  These
underlying holders do not appear on the register.  Accordingly, the spread of
the TRP020 Bonds is much wider than demonstrated by the register.

While the number of registered holders of the TRP020 Bonds may appear to be
small, TRP is of the view that the liquidity of the TRP020 Bonds will not be
affected by that small number given the number of investors who hold the
bonds through nominees and custodians.

TRP is uncertain as to when the number of holders recorded in the register
will meet the Spread Requirements set out in Rule 5.2.3 particularly given
the number of investors who hold the TRP020 Bonds through nominees and
custodians.  However, TRP expects that the spread of the TRP020 Bonds will
continue to increase (as it has since the bonds have been listed).

Given the number of investors that hold the TRP020 Bonds through nominees and
custodians and given TRP's uncertainty as to when the number of registered
holders will meet the Spread Requirements set out in Rule 5.2.3, TRP is
seeking an extension of the 2012 Waiver for a period of 12 months from 7
September 2013 on the condition that the Spread Requirements under Rule 5.2.3
are met for the TRP020 Bonds if the underlying holders who hold the TRP020
Bonds through nominees and custodians are taken into account.

Rule

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."
Decision

Subject to the conditions in paragraph 9 below, and on the basis that the
information provided by TRP is complete and accurate in all material
respects, NZXR grants TRP a waiver from Rule 5.2.3 in respect of the TRP020
Bonds for a period of 12-months from 7 September 2013, to allow TRP to have
fewer than 500 Bondholders who are Members of the Public.

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

TRP clearly and prominently discloses the 12-month waiver, its conditions,
and its implications in its half-year and annual reports; and

TRP notifies NZXR if there are any material changes to the spread of the
TRP020 Bonds.

Reasons

In coming to the decision to grant TRP a 12-month waiver from Rule 5.2.3,
NZXR has considered the following matters:

Debt securities are generally not subject to the same degree of trading
activity as equity securities;

TRP has advised that it expects the spread of TRP020 Bonds will continue to
increase;

The number of underlying holders of TRP020 Bond indicates that there is
investor demand for the TRP020 Bonds which will lead to a degree of liquidity
in the secondary market;

The condition, contained in paragraph 9(a) above, that TRP must disclose the
waiver decision, its conditions, and its implications in its half-year and
annual reports, will ensure that both existing TRP020 Bond holders and those
wishing to trade in TRP020 Bonds are aware of the current spread of the
TRP020 Bonds; and

NZXR has granted similar 12-month waivers in the past. The 12-month waiver
gives NZXR the opportunity to reconsider the spread of the TRP020 Bonds in 12
months if TRP considers a waiver is still required.

ENDS
End CA:00239261 For:TRP    Type:WAV/RULE   Time:2013-08-02 15:44:17