Issue of CIP2 equity securities

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz





STOCK EXCHANGE ANNOUNCEMENT

20 September 2018


Issue of CIP2 equity securities

Chorus has begun issuing equity securities to Crown Infrastructure Partners Limited
(CIP) for the UFB2 rollout, referred to as CIP2 equity securities, as set out in the
attached notices.

Securities will continue to be separately issued for the UFB1 rollout, now referred to
as CIP1 securities.


ENDS



For further information:

Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: brett.jackson@chorus.co.nz

---

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz
NZX Client Market Services
NZX Limited
Wellington


20 September 2018



NOTIFICATION OF ISSUE OF SECURITIES

For the purposes of Listing Rule 7.12.1 Chorus Limited (NZX: CNU) (Chorus) advises that the
following securities have been issued pursuant to the terms of the subscription agreement
between Chorus and Crown Infrastructure Partners Limited
*
(CIP) dated 26 January 2017 and
amended 30 August 2017 (UFB2 Subscription Agreement):

a) Class of Securities CIP2 Equity Securities* (unquoted)
ISIN Not applicable
b) Number issued 15,238,869
c) Issue price $1.00 per CIP2 Equity Security
d) Payment Cash
e) Amount paid up Paid in full
f) Principal terms of Securities
(other than for Quoted
Securities)
CIP2 Equity Securities are redeemable preference
shares carrying no right to vote at meetings of holders
of ordinary Chorus shares, but entitle the holder to a
right to a repayment preference on liquidation.
Dividends will become payable on a portion of the CIP2
Equity Securities from 2030 onwards, with the portion
of CIP2 Equity Securities that attract dividends
increasing over time.
Further information regarding the terms of the CIP2
Equity Securities is set out in the summary of CIP2
Securities available at
https://company.chorus.co.nz/reports.
g) Percentage of the total Class
of Securities issued
8.06% of those CIP2 Equity Securities eligible to be
issued under this programme at this time
h) Reason for issue Call notice issued by Chorus to CIP on 17 September
2018 pursuant to the terms of the UFB2 Subscription
Agreement
i) Specific authority for issue Board resolution passed on 24 August 2018
j) Terms or details of issue The terms of issue are as set out in the UFB2
Subscription Agreement. Further information regarding

the terms of the CIP2 Equity Securities is set out in the
Summary of CIP2 Securities available at
https://company.chorus.co.nz/reports
k) Total number of Securities of
Class after issue
15,238,869 (unquoted)
l) Treasury Stock (acquisition
only)
Not applicable
m) Date of issue 19 September 2018


*Crown Fibre Holdings Limited has changed its name to Crown Infrastructure Partners Limited. The securities the
subject of this notice are referred to in the UFB2 Subscription Agreement as the CFH2 Equity Securities but following
the name change are now referred to as the CIP2 Equity Securities.





Yours faithfully



Elaine Campbell
General Counsel & Company Secretary

---

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 1
Rule 2.7, 3.10.3, 3.10.4, 3.10.5
Appendix 3B

New issue announcement,
application for quotation of additional securities
and agreement

Information or documents not available now must be given to ASX as soon as available. Information and
documents given to ASX become ASX’s property and may be made public.
Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12,
04/03/13


Name of entity
Chorus Limited (“Chorus”)

ABN
152 485 848

We (the entity) give ASX the following information.


Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).

1
+
Class of
+
securities issued or to
be issued

CIP2 Equity Securities


2
Number of
+
securities issued or
to be issued (if known) or
maximum number which may be
issued

15,238,869 CIP2 Equity Securities



3
Principal terms of the
+
securities
(e.g. if options, exercise price and
expiry date; if partly paid
+
securities, the amount
outstanding and due dates for
payment; if
+
convertible
securities, the conversion price
and dates for conversion)

The CIP2 Equity Securities are redeemable preference
shares carrying no right to vote at meetings of holders of
ordinary Chorus shares, but entitle the holder to a right
to a repayment preference on liquidation.

The terms of the issue for the CIP2 Equity Securities
(together with the terms of issue for the CIP2 Debt
Securities) are as set out in the subscription agreement
between Chorus and Crown Infrastructure Partners
Limited* (CIP) dated 26 January 2017 and amended 30
August 2017 (UFB2 Subscription Agreement). Further
details are set out in the Summary of CIP2 Securities
available at https://company.chorus.co.nz/reports.

*Crown Fibre Holdings Limited has changed its name to Crown
Infrastructure Partners Limited. The securities the subject of this
notice are referred to under the UFB2 Subscription Agreement as the
CFH2 Equity Securities, but following the name change are referred
to as CIP2 Equity Securities.
4
Do the
+
securities rank equally in
all respects from the
+
issue date
with an existing
+
class of quoted
+
securities?

If the additional
+
securities do
not rank equally, please state:
 the date from which they do
 the extent to which they
participate for the next
dividend, (in the case of a
trust, distribution) or interest
payment
 the extent to which they do
not rank equally, other than
in relation to the next
dividend, distribution or
interest payment
CIP2 Equity Securities

No.
On a liquidation or winding up of Chorus, holders of CIP2
Equity Securities will have the right to repayment of the
issue price ranking behind creditors of Chorus but ahead
of ordinary Chorus shares. The CIP2 Equity Securities
will otherwise carry no right to share in the surplus assets
of Chorus on winding up or liquidation.




5 Issue price or consideration

$NZ1.00 per CIP2 Equity Security



6 Purpose of the issue
(If issued as consideration for the
acquisition of assets, clearly
identify those assets)
Call notice issued by Chorus to CIP on 17 September 2018
pursuant to the terms of the UFB2 Subscription
Agreement. The funds are to be used by Chorus in the
construction of the second phase of the Ultra-Fast
Broadband network in New Zealand.


6a
Is the entity an
+
eligible entity
that has obtained security holder
approval under rule 7.1A?

If Yes, complete sections 6b – 6h
in relation to the
+
securities the
subject of this Appendix 3B, and
comply with section 6i
N/a


6b The date the security holder
resolution under rule 7.1A was
passed
N/a


6c
Number of
+
securities issued
without security holder approval
under rule 7.1
N/a


6d
Number of
+
securities issued
with security holder approval
under rule 7.1A
N/a

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 3
6e
Number of
+
securities issued
with security holder approval
under rule 7.3, or another
specific security holder approval
(specify date of meeting)

N/a


6f
Number of
+
securities issued
under an exception in rule 7.2
N/a


6g
If
+
securities issued under rule
7.1A, was issue price at least 75%
of 15 day VWAP as calculated
under rule 7.1A.3? Include the
+
issue date and both values.
Include the source of the VWAP
calculation.
N/a


6h
If
+
securities were issued under
rule 7.1A for non-cash
consideration, state date on
which valuation of consideration
was released to ASX Market
Announcements
N/a


6i Calculate the entity’s remaining
issue capacity under rule 7.1 and
rule 7.1A – complete Annexure 1
and release to ASX Market
Announcements
N/a


7
+
Issue dates
Note: The issue date may be prescribed by ASX
(refer to the definition of issue date in rule
19.12). For example, the issue date for a pro rata
entitlement issue must comply with the
applicable timetable in Appendix 7A.
Cross reference: item 33 of Appendix 3B.

19 September 2018 for each of the CIP2 Equity
Securities.




Number
+
Class
8
Number and
+
class of all
+
securities quoted on ASX
(including the
+
securities in
section 2 if applicable)

429,641,197

500,000,000

fully paid ordinary shares

Euro Medium Term Notes

Number
+
Class
9
Number and
+
class of all
+
securities not quoted on ASX
(including the
+
securities in
section 2 if applicable)



15,238,869


387,813,517

387,813,517

10,929,965

CIP2 Equity Securities
(unquoted)

CIP1 Equity Securities (unquoted)

CIP1 Debt Securities (unquoted)

CIP1 Warrants (unquoted)


10 Dividend policy (in the case of a
trust, distribution policy) on the
increased capital (interests)













CIP2 Equity Securities
To the extent they have not been redeemed, dividends
will become payable on an increasing proportion of the
CIP2 Equity Securities from 2030 onwards. The dividend
rate on the CIP2 Equity Securities will be equal to a
reference rate plus a margin of 6% per annum.
Chorus is not obliged to declare any dividend on CIP2
Equity Securities in respect of any period, but if it does
not make a scheduled dividend on the CIP2 Equity
Securities it may not make any distribution on ordinary
shares until a subsequent dividend on the CIP2 Equity
Securities is paid in full. The dividends payable on the
CIP2 Equity Securities are non-cumulative.
If at any time Chorus' credit rating is three notches or
more below its initial rating, no dividends will be
scheduled or payable on the CIP2 Equity Securities.

Further details of the dividends for the CIP2 Equity
Securities are set out in the Summary of CIP2 Securities
available at https://company.chorus.co.nz/reports.


Part 2 - Pro rata issue

11 Is security holder approval
required?

N/a


12 Is the issue renounceable or non-
renounceable?
N/a


13
Ratio in which the
+
securities will
be offered
N/a


14
+
Class of
+
securities to which the
offer relates
N/a

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 5
15
+
Record date to determine
entitlements
N/a


16 Will holdings on different
registers (or subregisters) be
aggregated for calculating
entitlements?
N/a


17 Policy for deciding entitlements
in relation to fractions

N/a


18 Names of countries in which the
entity has security holders who
will not be sent new offer
documents
Note: Security holders must be told how their
entitlements are to be dealt with.
Cross reference: rule 7.7.
N/a


19 Closing date for receipt of
acceptances or renunciations
N/a

20 Names of any underwriters

N/a


21 Amount of any underwriting fee
or commission
N/a


22 Names of any brokers to the issue
N/a


23 Fee or commission payable to the
broker to the issue
N/a


24 Amount of any handling fee
payable to brokers who lodge
acceptances or renunciations on
behalf of security holders
N/a


25 If the issue is contingent on
security holders’ approval, the
date of the meeting
N/a


26 Date entitlement and acceptance
form and offer documents will be
sent to persons entitled
N/a


27 If the entity has issued options,
and the terms entitle option
holders to participate on exercise,
the date on which notices will be
sent to option holders
N/a

28 Date rights trading will begin (if
applicable)
N/a


29 Date rights trading will end (if
applicable)


N/a


30 How do security holders sell their
entitlements in full through a
broker?
N/a


31 How do security holders sell part
of their entitlements through a
broker and accept for the
balance?
N/a



32 How do security holders dispose
of their entitlements (except by
sale through a broker)?
N/a


33
+
Issue date


N/a

Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation of securities

34
Type of
+
securities
(tick one)

(a)

+
Securities described in Part 1


(b)

All other
+
securities
Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid,
employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible
securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities


Tick to indicate you are providing the information or
documents


35

If the
+
securities are
+
equity securities, the names of the 20 largest holders of the
additional
+
securities, and the number and percentage of additional
+
securities
held by those holders

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 7
36

If the
+
securities are
+
equity securities, a distribution schedule of the additional
+
securities setting out the number of holders in the categories
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over


37

A copy of any trust deed for the additional
+
securities


Entities that have ticked box 34(b)

38
Number of
+
securities for which
+
quotation is sought





39
+
Class of
+
securities for which
quotation is sought




40
Do the
+
securities rank equally in
all respects from the
+
issue date
with an existing
+
class of quoted
+
securities?

If the additional
+
securities do not
rank equally, please state:
 the date from which they do
 the extent to which they
participate for the next
dividend, (in the case of a trust,
distribution) or interest
payment
 the extent to which they do not
rank equally, other than in
relation to the next dividend,
distribution or interest
payment



41 Reason for request for quotation
now
Example: In the case of restricted securities, end
of restriction period

(if issued upon conversion of
another
+
security, clearly identify
that other
+
security)

Number
+
Class
42
Number and
+
class of all
+
securities quoted on ASX
(including the
+
securities in clause
38)


Quotation agreement

1
+
Quotation of our additional
+
securities is in ASX’s absolute discretion. ASX
may quote the
+
securities on any conditions it decides.

2 We warrant the following to ASX.

 The issue of the
+
securities to be quoted complies with the law and is
not for an illegal purpose.

 There is no reason why those
+
securities should not be granted
+
quotation.

 An offer of the
+
securities for sale within 12 months after their issue will
not require disclosure under section 707(3) or section 1012C(6) of the
Corporations Act.
Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able
to give this warranty

 Section 724 or section 1016E of the Corporations Act does not apply to
any applications received by us in relation to any
+
securities to be
quoted and that no-one has any right to return any
+
securities to be
quoted under sections 737, 738 or 1016F of the Corporations Act at the
time that we request that the
+
securities be quoted.

 If we are a trust, we warrant that no person has the right to return the
+
securities to be quoted under section 1019B of the Corporations Act at
the time that we request that the
+
securities be quoted.

3 We will indemnify ASX to the fullest extent permitted by law in respect of any
claim, action or expense arising from or connected with any breach of the
warranties in this agreement.

4 We give ASX the information and documents required by this form. If any
information or document is not available now, we will give it to ASX before
+
quotation of the
+
securities begins. We acknowledge that ASX is relying on
the information and documents. We warrant that they are (will be) true and
complete.

Sign here: ......................................................... Date: 19 September 2018
(Director/Company secretary)

Print name: Elaine Campbell
== == == == ==