The arranger and lead manager of the proposed issue is ANZ Investment Bank, who will also underwrite the issue.  ABN AMRO Craigs Limited will be appointed as the Organising Participant and ABN AMRO Craigs Limited and Forsyth Barr Limited will be appointed Co-Managers of the issue. 

The bonds will be issued pursuant to a trust deed to be entered into between Powerco and The New Zealand Guardian Trust Company Limited as trustee.

The interest rate payable on the bonds will be fixed for the five-year term of the bonds.  The interest payable on the bonds is intended to be the higher of 7.6% per annum and the aggregate of a margin of 0.8% per annum and the five year swap rate on the date Powerco, in conjunction with ANZ Investment Bank, as lead manager and underwriter, set the interest rate, which is expected to be on 16 March 2005. Interest will be paid quarterly in arrears.

The bonds will be subordinated to all creditors of Powerco other than creditors whose claims rank, or are expressed or intended to rank, equally with or subordinate to the bonds.

Powerco has applied to Standard & Poor’s to have the bonds rated.  A rating will be assigned by Standard & Poor’s prior to the opening of the issue.

It is intended that a prospectus will be registered on approximately 16 March, and the investment statement will be available, and the issue will open, on 21 March 2005.

Powerco Chief Executive Steven Boulton said the proceeds of the issue are intended to be used to repurchase $100 million of capital bonds issued by Powerco which, following the takeover of Powerco by Prime Infrastructure in November 2004, are now all held by Prime Infrastructure.  Following repurchase by Powerco, the capital bonds will be cancelled.

Application has been made to NZX for permission to list the bonds.  However, NZX accepts no responsibility for any statement in this announcement.

No money is currently being sought and no applications for the bonds will be accepted or money received unless the subscriber has received an investment statement.