NZX sets initial interest rate for subordinated note offer

NZX Limited
Level 1, NZX Centre
11 Cable Street
PO Box 2959
Wellington 6140
New Zealand
Tel +64 4 472 7599

www.nzx.com

www.nzx.com 1 of 2
25 May 2018

NZX sets initial interest rate for subordinated note offer at 5.40% per annum

Further to the announcement by NZX Limited ("NZX") of an offer of up to $40 million of
unsecured, subordinated notes (“Subordinated Notes”), NZX announces that, following a
successful bookbuild, $35 million of Subordinated Notes have been allocated to participants in
the bookbuild process, under the general offer of Subordinated Notes ("General Offer").

The initial interest rate to apply to the Subordinated Notes for the first five years until the first
election date has been set at 5.40% per annum, being the minimum interest rate.

The Subordinated Notes are expected to be quoted on the NZX Debt Market under the ticker
code NZX010.

The offer is expected to open on Monday 28 May 2018 and is comprised of:

 a priority offer of up to $5 million of Subordinated Notes to New Zealand NZX
Shareholders ("Priority Offer"). The Priority Offer is expected to close on Friday 8 June
2018 at 5pm (New Zealand time); and

 the General Offer of up to $35 million of Subordinated Notes to investors resident in New
Zealand and institutional investors who were invited to participate in the bookbuild. The
General Offer is expected to close on Friday 15 June 2018 at 5pm (New Zealand time).

New Zealand NZX Shareholders may apply for Subordinated Notes in the Priority Offer by filling
out and returning the Priority Offer application form. As announced previously, there is no public
pool available for the offer, with all of the Subordinated Notes under the General Offer being
reserved for clients of the joint lead managers, co-manager and other approved financial
intermediaries.

Early bird interest will be paid at the interest rate in respect of accepted applications. Investors
are therefore encouraged to lodge their applications as soon as possible to take advantage of
this.

Further details of the offer are contained in the product disclosure statement ("PDS") for the
Subordinated Notes. The PDS is available at: www.nzxnote.co.nz or by contacting a joint lead
manager or co-manager, and must be obtained by investors before they decide to acquire any
Subordinated Notes.

For further information please contact:

Arranger and Joint Lead Manager
Forsyth Barr Limited



Phone: 0800 367 227



Joint Lead Managers
Commonwealth Bank of Australia FNZC
(acting through its New Zealand
branch)


Phone: 0800 272 633 Phone: 0800 005 678




Co-manager
Bank of New Zealand

Phone: 0800 284 017




NZX
Hannah Lynch
Head of Communications
T: 09 308 3710
M: 021 252 8990
E: hannah.lynch@nzx.com

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NZX Limited
Final Terms Sheet for an offer of
up to $40,000,000 of Subordinated Notes
Date 25 May 2018
Arranger and Joint Lead Manager
Joint Lead Managers
Co-manager

This terms sheet (“Terms Sheet”) should be read together with the product disclosure statement (“PDS”) dated 15 May 2018
for the offer of unsecured, subordinated notes (“Subordinated Notes”) by NZX Limited (the “Offer”). The PDS is available
at www.nzxnote.co.nz and can also be obtained from the Joint Lead Managers, Co-manager or your usual financial adviser.
Investors must obtain and read a copy of the PDS before they apply for Subordinated Notes.
Capitalised terms used but not defined in the Terms Sheet have the meaning given to them in the PDS.
Issuer
NZX Limited (the “Issuer” or “NZX”).
Instrument
Unsecured, subordinated notes.
Offer amount
Up to $40 million.
Structure of the Offer
The Offer consists of:
• a Priority Offer of up to $5 million, which is open only to New Zealand NZX Shareholders;
and
• a General Offer of up to $35 million. The General Offer is open to investors resident in
New Zealand and certain institutional investors.
If any amount of the Priority Offer is not taken up by the Closing Date for the Priority Offer, NZX
may reallocate up to a corresponding amount to the General Offer at its absolute discretion.
A minimum amount of $25 million must be raised before the Subordinated Notes are issued.
Purpose of the Offer
To enable NZX to repay existing debt and provide funding for general corporate purposes. The
Offer will also provide NZX with diversification of funding sources and extend the tenor of NZX’s
debt.
Ranking of the
Subordinated Notes
The Subordinated Notes will be unsecured and will rank equally with all other Subordinated
Notes and behind all indebtedness of NZX, other than indebtedness expressed to be equal
with or subordinate to the Subordinated Notes.
Interest Rate
The Subordinated Notes will pay a fixed rate of interest for the first 5 years until the first
Election Date.
The initial Interest Rate has been set at 5.40% per annum.
The initial Interest Rate equals the minimum interest rate for the Offer.
If NZX runs an Election Process, a new Interest Rate may be set via that process.
Interest Payment Dates
Interest shall be paid quarterly in arrear in equal amounts.
On Interest Payment Dates, interest will be paid to the person registered as the Noteholder as
at the Record Date.
The Record Date for the Interest Payment Date is 5pm on the date that is 10 calendar days
before the relevant Interest Payment Date.
If the Record Date falls on a day which is not a Business Day, the Record Date will be the
immediately preceding Business Day.
Interest deferral
NZX may defer the payment of interest at its absolute discretion.
In the event interest is deferred the Interest Rate will increase to the Penalty Rate. The Penalty
Rate is the sum of the Interest Rate plus an additional 4.00% per annum.
Any Deferred Interest will also accrue interest at the Penalty Rate, compounding on each
Interest Payment Date until paid.
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Final Terms Sheet

Dividend Stopper
NZX will not be able to pay any dividend or make any other payments on or with respect
to Shares or other securities or indebtedness ranking equally with or subordinate to the
Subordinated Notes:
• if and for so long as there is any unpaid or Deferred Interest; or
• if the Financial Covenant is failed on two consecutive Test Dates, until NZX complies with
the Financial Covenant.
Election Process
No less than 30 Business Days prior to an Election Date, NZX will provide notice of its election
to either:
• Redeem the Subordinated Notes on the Election Date; or
• run an Election Process offering New Conditions.
If NZX runs an Election Process, Noteholders can either:
• elect to continue to hold some or all of their Subordinated Notes subject to the New
Conditions; or
• elect for NZX to Redeem some or all of their Subordinated Notes for cash at the
Redemption Amount.
The New Conditions may modify the conditions applying to the Subordinated Notes (including,
for example, the Interest Rate, Penalty Rate and Financial Covenant) but may not change the
Maturity Date or Election Dates.
Noteholders who do not respond to an Election Notice will be deemed to have accepted the
New Conditions.
Redemption Amount
Principal Amount plus all accrued but unpaid interest (including Deferred Interest).
Change of Control
Event
The occurrence of one or more of the following:
• an offer is made which would result in the offeror (including its associates) holding or
controlling more than 50% of the voting rights of NZX and the offer has been accepted,
become unconditional and all regulatory approvals have been obtained; or
• any other circumstance or event arises which results in a person (and its associates) holding
or controlling more than 50% of the voting rights of NZX.
If a Change of Control Event occurs then Noteholders have the right to elect that NZX must
Redeem all of their Subordinated Notes for the Redemption Amount.
Tax Event
In summary, a Tax Event may occur if there has been, or there will be, a change in New Zealand
law applying after the Issue Date, as a result of which:
• any interest payable on the Subordinated Notes, including interest which has been
deferred, is not fully deductible for the purposes of the Income Tax Act 2007; or
• NZX would be, or is likely to be, exposed to any other adverse tax consequences in relation
to the Subordinated Notes.
If a Tax Event occurs, NZX may elect to Redeem all of your Subordinated Notes at the
Redemption Amount.
Less than 10 million
Subordinated Notes
At any time, NZX may elect to Redeem at the Redemption Amount all (but not some only)
of the Subordinated Notes on issue if there are less than 10 million Subordinated Notes
outstanding.
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Final Terms Sheet

Events of Default
The Subordinated Notes may become immediately Redeemable at the Redemption Amount if
one of the following Events of Default occurs:
• NZX fails to pay the Principal Amount or interest when due, and that breach is not fully
remedied within 10 days of the due date for payment;
• NZX fails to comply with the Dividend Stopper; or
• an Insolvency Event of NZX occurs.
A failure to pay interest that has been deferred is not an Event of Default. NZX may defer
payments of interest at any time at its discretion.
Financial Covenant
NZX has undertaken that it will ensure that the ratio of Net Senior Debt to Operating Earnings
will be no greater than 1.5:1.
The Financial Covenant will be first tested as at 31 December 2018 and every six months
thereafter.
Retail Liquidity
Support Facility
NZX has engaged a Facility Agent to provide a Retail Liquidity Support Facility on a reasonable
endeavours basis on behalf of NZX. This arrangement intends to facilitate and support liquidity
for small investors where liquidity is not otherwise being provided by the market.
Listing
NZX Debt Market.
Early Bird Interest
Interest will be calculated on a daily basis at the Interest Rate on application money in respect
of accepted applications from, and including the date that application money is received into
the bank account for the Offer until but not including the Issue Date (“Early Bird Interest”).
Early Bird Interest will be paid to you (less any withholding tax required to be deducted) as soon
as practicable and in any event within 5 Business Days of the Issue Date.
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Final Terms Sheet

Important dates
PDS lodged 15 May 2018
Minimum interest rate and indicative issue margin announced 17 May 2018
Rate Set Date25 May 2018
Opening Date28 May 2018
Closing Date for the Priority Offer8 June 2018
Closing Date of the General Offer15 June 2018
Issue Date and allotment date20 June 2018
Expected date of initial quotation and trading on the NZX
Debt Market21 June 2018
Interest Payment Dates
20 March, 20 June, 20 September, 20 December
in each year, with the first Interest Payment Date
being 20 September 2018*
Election Dates20 June 2023, 20 June 2028
Maturity Date 20 June 2033
* If any date on which an interest payment is due to be made is not a Business Day, payment shall instead be made on the
next Business Day. Interest payments may be deferred at NZX’s discretion, as described in the PDS.
The dates set out in this Terms Sheet are indicative only and subject to change. The Issuer may vary the timetable in its
absolute discretion and without notice. Any such changes will not affect the validity of any applications received. The Issuer
reserves the right to cancel the Offer, in which case all application monies received will be refunded (without interest) as
soon as practicable.
Selling restrictions
You may only offer for sale or sell any Subordinated Note in conformity with all applicable laws and regulations in any
jurisdiction in which it is offered, sold or delivered.
NZX has not taken and will not take any action which would permit a public offering of Subordinated Notes, or possession or
distribution of any offering material in respect of the Subordinated Notes, in any country or jurisdiction where action for that
purpose is required (other than New Zealand).
Any information memorandum, disclosure statement, circular, advertisement or other offering material in respect of the
Subordinated Notes may only be published, delivered or distributed in compliance with all applicable laws and regulations
(including those of the country or jurisdiction in which the material is published, delivered or distributed).
By subscribing for or otherwise acquiring any Subordinated Notes, you agree to indemnify, among others, NZX, the Supervisor,
the Arranger, the Joint Lead Managers and Co-manager for any loss suffered as a result of any breach by you of the selling
restrictions referred to in this section.
NZX Limited, Level 1 / NZX Centre, 11 Cable Street, PO Box 2959, WELLINGTON
Tel: +64 4 472 7599 | subordinatednotes@nzx.com | www.nzx.com
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Final Terms Sheet