Notification of issue of CIP securities

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

Email: company.secretary@chorus.co.nz





STOCK EXCHANGE ANNOUNCEMENT

14 June 2019


Notification of issue of CIP securities

Chorus Limited has issued further Crown Infrastructure Partners (CIP) securities as
per the attached notices.





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

---

Capital Change Notice
Updated as at 8 May 2019
Page 1 of 3

Section 1: Issuer information
Name of issuer Chorus Limited
NZX ticker code CNU
Class of financial product CIP2 Equity Securities (unquoted)
ISIN N/a
Currency NZD
Section 2: Capital change details
Number issued/acquired/redeemed 2,773,655
Nominal value (if any) N/a.
Issue/acquisition/redemption price per
security
NZ$1.000000 per CIP2 Equity Security.
Nature of the payment (for example, cash
or other consideration)
Cash.
Amount paid up (if not in full) N/a.
Percentage of total class of Financial
Products issued/acquired/redeemed/
(calculated on the number of Financial
Products of the Class, excluding any
Treasury Stock, in existence)
6.20%
For an issue of Convertible Financial
Products or Options, the principal terms
of Conversion (for example the
Conversion price and Conversion date
and the ranking of the Financial Product
in relation to other Classes of Financial
Product) or the Option (for example, the
exercise price and exercise date)
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.

Chorus may redeem CIP2 Equity Securities at any
time:

 by cash payment of the total issue price of
CIP2 Equity Securities to be redeemed; or
 by the issue of ordinary Chorus shares of a
value equal to the total issue price of the CIP2
Equity Securities to be redeemed (with those
ordinary Chorus shares valued at a 5%
discount to the 20-day VWAP for Chorus
shares traded in ordinary trading on NZX).

In the event that the Network Infrastructure Project
Agreement dated 26 January 2017 (NIPA2) between

Page 2 of 3
Chorus and Crown Infrastructure Partners Limited
(CIP) is terminated, either for a material breach by
Chorus, a serious health and safety event, or for a
challenge by Chorus to the enforceability of
liquidated damages, service default payments or
material breach liquidated damages under NIPA2, or
in the event that the Chorus Board resolves to pay a
dividend on the CIP2 Equity Securities but that
dividend is not paid, a holder of CIP2 Equity
Securities can elect to:

 continue to hold the CIP2 Equity Securities;
 exchange the CIP2 Equity Securities for
voting preference shares; or
 exchange the CIP2 Equity Securities for
ordinary Chorus shares of a value equal to
the lesser of the “fair value” and the issue
price of the CIP2 Equity Securities (with those
ordinary Chorus shares valued at a 5%
discount to the 20-day VWAP for ordinary
Chorus shares traded in ordinary trading on
NZX).

CIP or a Crown Entity (who has executed the
applicable accession documentation) can also elect
one of the options above in relation to the CIP2
Equity Securities it holds if a prescribed insolvency
event occurs in relation to Chorus.
Further information regarding the terms of the CIP2
Equity Securities is set out in the Summary of CIP2
Securities which is available at
https://company.chorus.co.nz/reports.
Reason for issue/acquisition/redemption
and specific authority for
issue/acquisition/redemption/ (the reason
for change must be identified here)
The funds are to be used by Chorus in the
construction of the Ultra-Fast Broadband network in
New Zealand.

The CIP2 Equity Securities have been issued
pursuant to:

 the terms of the subscription agreement
between Chorus and CIP dated
26 January 2017 and amended
30 August 2017 (UFB2 Subscription
Agreement);
 a call notice issued by Chorus to CIP on
11 June 2019 pursuant to the terms of the
UFB2 Subscription Agreement; and
 a Chorus Board resolution passed on
24 August 2018.
Total number of Financial Products of the
Class after the
issue/acquisition/redemption/Conversion
47,510,538 CIP2 Equity Securities (unquoted).

No CIP2 Equity Securities are held as treasury stock.

Page 3 of 3

(excluding Treasury Stock) and the total
number of Financial Products of the
Class held as Treasury Stock after the
issue/acquisition/redemption.
In the case of an acquisition of shares,
whether those shares are to be held as
treasury stock
N/a.
Specific authority for the issue,
acquisition, or redemption, including a
reference to the rule pursuant to which
the issue, acquisition, or redemption is
made
Board resolution passed on 24 August 2018.

The CIP2 Equity Securities have been issued under
listing rule 4.5.
Terms or details of the issue, acquisition,
or redemption (for example: restrictions,
escrow arrangements)
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 which is
available at https://company.chorus.co.nz/reports.
Date of issue/acquisition/redemption 13 June 2019
Section 3: Authority for this announcement and contact person
Name of person authorised to make this
announcement
Elaine Campbell
General Counsel & Company Secretary
Contact person for this announcement Brett Jackson
Investor Relations Manager
Contact phone number +64 4 896 4039
+64 27 488 7808
Contact email address Brett.Jackson@chorus.co.nz
Date of release through MAP 14 June 2019

---

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 (unquoted)


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

2,773,655 CIP2 Equity Securities (unquoted)




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 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 which is available at
https://company.chorus.co.nz/reports.

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 11 June 2019 pursuant
to the terms of the UFB2 Subscription Agreement. The funds
are to be used by Chorus in the construction 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


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.

13 June 2019







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



439,288,154

Fully paid ordinary shares

500,000,000 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)



47,510,538 CIP2 Equity Securities
(unquoted)
415,933,453

CIP1 Equity Securities
(unquoted)
415,933,453 CIP1 Debt Securities
(unquoted)

12,255,737 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 which is 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


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


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)

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 8
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: 13 June 2019
(Director/Company Secretary)

Print name: Elaine Campbell

== == == == ==