Mercury Launches $200M Green Bond Offer to Refinance Wind and Geothermal Assets
Mercury launches $200 million Green Bond offer to refinance renewable energy assets
Mercury NZ Limited has launched a retail Green Bond offer of up to $200 million, with capacity for an additional $50 million in oversubscriptions at the company’s discretion. The 7-year unsecured, unsubordinated, fixed rate green bonds mature 1 April 2033 and carry an expected credit rating of BBB+ by S&P Global Ratings. The offer opened 23 March 2026, with closing expected 25 March 2026 and issuance on 1 April 2026.
The indicative issue margin range sits between 0.95% to 1.05% per annum. Proceeds will be notionally allocated to finance or refinance eligible renewable energy projects under Mercury’s Green Financing Framework, specifically targeting wind and geothermal assets. Mercury expects to apply the net proceeds to refinance existing debt whilst maintaining balance sheet discipline within its BBB+ credit framework.
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What are Green Bonds and why do they matter?
Green Bonds are debt instruments where proceeds are earmarked for environmentally beneficial projects. Mercury’s Green Financing Framework aligns with the Climate Bonds Standard and Green Bond Principles, demonstrating the company’s commitment to sustainable financing practices.
The framework has received programmatic certification from the Climate Bonds Initiative covering wind and geothermal assets. Mercury commits to annual allocation and impact reporting, providing transparency to investors. This certification and external review process adds credibility to the company’s environmental claims, appealing to ESG-conscious investors whilst demonstrating responsible financing practices.
Key terms and investor access
| Term | Detail |
|---|---|
| Offer Amount | Up to $200 million (plus $50 million oversubscriptions) |
| Maturity | 1 April 2033 (7 years) |
| Interest Payments | Semi-annual (1 April and 1 October) |
| Expected Credit Rating | BBB+ (S&P Global Ratings) |
| Indicative Issue Margin | 0.95% – 1.05% per annum |
| Minimum Application | $5,000 (then $1,000 increments) |
| NZX Ticker | MCY080 |
There is no public pool for the offer, with all bonds reserved for clients of Joint Lead Managers, institutional investors and primary market participants. Retail investors should contact a Joint Lead Manager or financial adviser for access. The bond structure provides income investors with a fixed-rate return from a BBB+ rated issuer with majority Crown ownership.
Mercury’s financial discipline and credit profile
Mercury maintains a through-cycle financial policy targeting Net Debt / EBITDA of 2x – 3x (S&P adjusted). Current leverage sits at 2.2x as at HY26, demonstrating headroom within policy settings. Investment decisions are staged to remain within this policy framework.
Available liquidity exceeds $350 million in cash and undrawn committed facilities as at 28 February 2026. The company maintains a well-laddered debt maturity profile with diversified funding sources. Stay-In-Business CAPEX is funded first to protect availability and compliance, whilst Growth CAPEX remains discretionary and staged through investment gates. Mercury maintains balance sheet headroom to manage volatility whilst funding growth investments, a key consideration for fixed income investors assessing credit risk.
Mercury’s renewable generation portfolio and growth pipeline
Mercury operates a 100% renewable generation portfolio spanning hydro, geothermal and wind assets. Recent project delivery demonstrates execution capability:
- Ngā Tamariki OEC5 geothermal expansion: Commissioning commenced January 2026, delivered on time and on budget
- Kaiwera Downs Stage 2 Wind Farm (155MW): Civil construction nearing completion, first generation expected May 2026 with 11 turbines ready to generate when connected
- Kaiwaikawe Wind Farm (77MW): First generation expected August 2026
The company targets 3.5 TWh of new renewable generation by 2030. Mercury’s proven delivery track record reduces execution risk for bondholders, supporting confidence in the company’s ability to generate sustainable cash flows.
Strategic rationale for the Green Bond offer
Mercury’s Strategic Purpose
The offer enables Mercury to proactively refinance and extend its debt maturity profile whilst maintaining liquidity headroom within its through-cycle financial policy. This approach supports the company’s ability to fund disciplined, staged renewable investment whilst protecting balance sheet metrics.
Mercury maintains a diversified portfolio that supports stable cash generation through cycles. The company has extended its C&I portfolio duration from 3 to 5 years in recent years as electricity prices have increased, and is signing longer-term Power Purchase Agreements with key industrial customers to underpin new builds, including contracts with NZ Aluminium Smelter, Fonterra, Visy and Amazon.
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What’s next for Mercury
The offer timeline proceeds as follows:
- Closing Date: 11:00am NZT, 25 March 2026
- Rate Set Date: 25 March 2026
- Issue Date: 1 April 2026
- Expected NZX quotation: 2 April 2026
The interest rate will be announced via NZX following the bookbuild process on the rate set date. Mercury’s ongoing growth pipeline reflects commitment to disciplined capital allocation within its BBB+ credit framework.
The offer provides investors with an opportunity to access a BBB+ rated green bond from a company with majority Crown ownership and a clear strategic focus on renewable energy growth. Mercury’s balance sheet discipline, proven project delivery capability and certified green framework position the bonds as an investment combining income generation with environmental credentials.
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