Contact Energy locks in NZ$350 million green capital bonds at 5.80%
Contact Energy released the final terms sheet on 5 November 2026 for its issue of NZ$350 million of unsecured, subordinated, redeemable, cumulative, interest-bearing green capital bonds. The initial interest rate is 5.80% per annum, being the Minimum Initial Interest Rate, and the bonds mature on 19 May 2057.
The bonds will trade on the NZX Debt Market under the ticker CEN100, with an issue price of NZ$1.00 per Capital Bond. The bookbuild is complete and the rate is set, so pricing and structure are now known.
Forsyth Barr Capital Markets Limited is Arranger and Joint Lead Manager. Bank of New Zealand and Craigs Investment Partners Limited are Joint Lead Managers.
Key terms at a glance
The table below summarises the main terms of the Contact Energy green capital bonds.
| Term | Detail |
|---|---|
| Issue Amount | NZ$350 million |
| Term | 30.5 years |
| Initial Interest Rate | 5.80% p.a., fixed for 5.5 years |
| Initial Margin | 1.70% p.a. |
| Interest payments | Paid quarterly in arrear |
| Minimum application | NZ$5,000, with multiples of NZ$1,000 thereafter |
Only clients of the Joint Lead Managers, institutional investors and other primary market participants invited to participate in the Bookbuild could take part. There is no public pool for the Capital Bonds.
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CEN060 redemption and use of proceeds
Following the Bookbuild, Contact has issued a redemption notice to holders of its NZ$225 million CEN060 Bonds, which carry an interest rate of 4.33% per annum and a final maturity of 19 November 2051. The CEN060 Bonds are to be redeemed on the first reset date, 19 November 2026.
Proceeds from the new issue will be used for the financing and refinancing of renewable generation and other eligible green assets (Green Assets) under the Sustainable Finance Framework. Contact expects to apply the net proceeds to repay existing debt, including the CEN060 Bonds.
The Contact Energy bond offer was first pitched at a NZ$225 million base size, matching the amount of the CEN060 Bonds being repaid, before strong demand lifted the final issue.
The CEN060 Bonds carry 4.33%, while the new Capital Bonds have an initial rate of 5.80%.
Green credentials
The Capital Bonds are Green Debt Instruments under Contact’s Sustainable Finance Framework. They are certified by the Climate Bonds Initiative (CBI) based on the Climate Bonds Standard.
Contact has received pre-issuance certification from CBI for the bonds. It also received a Second Party Opinion on the Sustainable Finance Framework from DNV Business Assurance Australia Pty Ltd in October 2025.
Capital Bonds explained: why hybrids matter to investors
Capital bonds are hybrid securities, sitting between senior debt and ordinary shares. They differ from a standard senior bond in several ways:
- Ranking: The bonds are subordinated to all other indebtedness of Contact, other than indebtedness expressed to rank equally with, or subordinate to, them. They rank equally with the NZ$250 million CEN090 Bonds (5.67%, final maturity 3 October 2054).
- Interest deferral: Contact may defer interest for up to five years at its sole discretion. Unpaid Interest is cumulative and itself accrues interest, compounding on each Interest Payment Date.
- Distribution Stopper: While Unpaid Interest is outstanding, restrictions apply to dividends, distributions and interest payments on securities ranking after the Capital Bonds.
- Margin step-ups: The Initial Margin rises by 0.25% from 19 May 2037 and by 1.00% from 19 May 2052, unless Redeemed earlier.
- Optional redemption: Contact may Redeem some or all of the bonds on any date in the three months before the First Reset Date, on any Reset Date, or on any Interest Payment Date after a Reset Date, by giving prior written notice, provided that after any partial Redemption, there will still be at least 100,000,000 Capital Bonds outstanding.
Credit and equity treatment
S&P Global Ratings assigns Contact an issuer credit rating of BBB (stable outlook). The Capital Bonds carry an issue credit rating of BB+, two notches below, with one notch deducted for subordination and one for the potential for interest deferral.
S&P assigned an “intermediate” equity content, meaning it considers the bonds to comprise 50% equity when calculating its financial ratios for Contact. That equity content is expected to fall to minimal (0%) on 19 May 2032.
Contact believes hybrid securities ascribed equity content are an effective capital management tool and intends to maintain them as a key feature of its capital structure.
What happens next for Contact’s capital bonds
The dates below are indicative only. Contact, in conjunction with the Joint Lead Managers, may change them, and Contact has the right in its absolute discretion and without notice to choose not to proceed with the Offer.
- Issue Date: Thursday, 19 November 2026, with the CEN060 Bonds to be redeemed on 19 November 2026.
- Expected initial quotation and trading on the NZX Debt Market: Friday, 20 November 2026. The bonds have not yet been approved for trading.
- First Interest Payment Date: 19 February 2027.
- First Reset Date: 19 May 2032.
- First Step-up Date: 19 May 2037, unless Redeemed earlier.
- Second Step-up Date: 19 May 2052, unless Redeemed earlier.
- Maturity Date: 19 May 2057.
The product disclosure statement was lodged on 22 October 2026, the offer opened on 2 November 2026, and it closed at 11.00am on 5 November 2026, the same day as the Rate Set Date.
Bookbuild demand reached about 2.3 times the amount on offer, which is how the issue grew beyond its base size with NZ$125 million of extra bonds.
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