Mercury green bond offer – interest rate set

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The Mercury Building, 33 Broadway, Newmarket 1023

PHONE:
+ 64 9 308 8200
mercury.co.nz
PO Box 90399, Auckland 1142
New Zealand

FAX:
+ 64 9 308 8209



Mercury NZ Limited green bond offer – interest rate set
4 September 2020 - Mercury NZ Limited (Mercury) today announced that, following a bookbuild for its offer of 7
year unsecured, unsubordinated fixed rate green bonds (Green Bonds), $200 million of Green Bonds have been
allocated to participants (or their clients) in the bookbuild process. There was no public pool for the offer.

The interest rate for the Green Bonds has been set at 1.56% per annum. This reflects a margin of 1.25% per
annum over the underlying swap rate.

The Green Bonds will be issued on Monday 14 September 2020 and will mature on Tuesday 14 September 2027.

The Green Bonds are expected to be quoted on the NZX Debt Market under the ticker code MCY030.

Details of the offer are contained in Mercury’s Product Disclosure Statement (PDS). To obtain a free copy of the
PDS for the Green Bonds, investors should contact one of the Joint Lead Managers listed below, or their usual
financial adviser. A copy of the PDS is also available at www.mercury.co.nz/green-bonds.

A copy of the final terms sheet has been provided to NZX with this announcement.

Arranger, Green Bond Co-ordinator and Joint Lead Manager

0800 269 476


Joint Lead Managers

0800 284 017 0800 226 263 0800 367 227
STOCK EXCHANGE LISTINGS: NZX (MCY) / ASX (MCY)

NEWS RELEASE

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ENDS
Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited

For investor relations queries, please contact:
William Meek
Chief Financial Officer
0275 173 470
For media queries, please contact:
Craig Dowling
Head of Communications
0272 105 337


ABOUT MERCURY NZ LIMITED
Mercury’s mission is energy freedom. Our purpose is to inspire New Zealanders to enjoy energy in more wonderful
ways and our goal is to be New Zealand’s leading energy brand. We focus on our customers, our people, our
partners and our country; maintain a long-term view of sustainability; and promote wonderful choices. Mercury is
energy made wonderful. Visit us at: www.mercury.co.nz

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FINAL
TERMS SHEET.
FIXED RATE
GREEN BONDS.
4 SEPTEMBER 2020.
Arranger, Green Bond
Co-ordinator & Joint
Lead Manager
Joint Lead
Managers

IssuerMercury NZ Limited (Mercury)
Description of
Green Bonds
Unsecured, unsubordinated fixed rate green bonds (Green Bonds).
Term7 years, maturing Tuesday 14 September 2027.
Issue Amount$200,000,000.
Credit RatingsIssuer Credit RatingCredit Rating for Green Bonds
S&P Global RatingsBBB+ (stable)BBB+
Mercury’s current Issuer Credit Rating includes a one-notch uplift from the company’s stand-alone credit
profile of ‘bbb’, reflecting the legislated majority ownership by the Crown. The Crown does not guarantee the
Green Bonds and is under no obligation to provide financial support to Mercury.
A credit rating is an independent opinion of the capability and willingness of an entity to repay its debts (in
other words, its creditworthiness). It is not a guarantee that the financial product being offered is a safe
investment. A credit rating should be considered alongside all other relevant information when making an
investment decision.
A credit rating is not a recommendation by any rating organisation to buy, sell or hold Green Bonds. The
above credit ratings are current as at the date of this Terms Sheet and may be subject to suspension, revision
or withdrawal at any time by S&P Global Ratings.
The Green Bond
Principles and Climate
Bonds Standard
Mercury has developed and adopted the Green Financing Framework to ensure that, as at the date of the
PDS, its processes for identifying Eligible Projects and managing the use of the proceeds of the Green Bonds
are consistent with the Green Bond Principles published by the International Capital Market Association and
the Climate Bonds Standard.
If Mercury fails to comply with the Green Financing Framework or related matters or if the Green Bonds
cease to satisfy the Green Bond Principles or Climate Bonds Standard:
• no Event of Default or any other breach will occur in relation to the Green Bonds; and
• neither you nor Mercury have any right for the Green Bonds to be repaid early.
This means there is no legal obligation on Mercury to comply with the Green Financing Framework, the
Green Bond Principles or the Climate Bonds Standard on an ongoing basis. See the PDS for further
information.
FINAL TERMS SHEET.
Final Terms Sheet for an issue of $200,000,000 unsecured, unsubordinated fixed rate green bonds due
Tuesday 14 September 2027
Dated 4 September 2020
The product disclosure statement (PDS) for the Green Bonds, which contains full details of the offer, is
available at www.mercury.co.nz/green-bonds or can be obtained from the Joint Lead Managers or your
usual financial adviser. Investors must obtain a copy of the PDS before they apply for Green Bonds.

PurposeThe proceeds of this offer are intended to be earmarked to finance or refinance new or existing projects
and expenditures relating to Eligible Projects in accordance with Mercury’s Green Financing Framework.
In particular, as at the date of this Terms Sheet Mercury expects to apply the net proceeds of the offer to
refinance existing debt, and to track an amount equal to the net proceeds within its systems, earmarked to
Eligible Projects, primarily the construction of the Turitea wind farm.
Issue Price$1.00 per Green Bond, being the Principal Amount of each Green Bond.
Interest Rate1.56% per annum, being the sum of the Swap Rate on the Rate Set Date and the Issue Margin.
Issue Margin1.25% per annum
Swap RateThe mid-market rate for an interest rate swap of a term matching the period from the Issue Date to the
Maturity Date as calculated by the Arranger in conjunction with Mercury, according to market convention,
with reference to Bloomberg page ICNZ4 (or any successor page) on the Rate Set Date (rounded to 2
decimal places, if necessary, with 0.005 rounded up).
Interest PaymentsSemi-annual in arrear in equal amounts on 14 March and 14 September in each year (or if that day is not a
Business Day, the next Business Day) until and including the Maturity Date, with the First Interest Payment
Date being 14 March 2021. As the First Interest Payment Date is a Sunday, interest is payable on Monday 15
March 2021 instead.
Record Date5.00pm on the date that is 10 calendar days before the relevant scheduled Interest Payment Date (prior to
any adjustment to the Interest Payment Date to fall on a Business Day). If the record date falls on a day which
is not a Business Day, the record date will be the immediately preceding Business Day.
Financial CovenantMercury agrees to ensure that Net Worth (being total assets less total liabilities of Mercury and its
subsidiaries, on a consolidated basis, calculated in accordance with the Master Trust Deed) at any time will
not be less than $500 million.
GuaranteeMercury is the issuer and the sole obligor in respect of the Green Bonds. None of the Crown, any subsidiary
of Mercury or any other person guarantees the Green Bonds.

RankingOn a liquidation of Mercury, the Green Bonds will rank as unsecured and unsubordinated obligations of
Mercury and will rank:
• below any secured liabilities and liabilities which are preferred by law;
• equally with liabilities owed to Mercury’s USPP noteholders, banks and certain financial institutions that
have lent money to Mercury, however (unlike Bondholders) those creditors have the benefit of guarantees
from certain subsidiaries of Mercury so may also claim directly against those subsidiaries;
• equally with (and will be repaid at the same time and pro rata with) all other unsecured and
unsubordinated liabilities of Mercury, such as those owing to other Bondholders; and
• ahead of Mercury’s subordinated liabilities (including capital bonds) and shareholders.
SecurityThe Green Bonds are not secured.
No Public PoolThere is no public pool for the Green Bonds. All Green Bonds (including any oversubscriptions) will be
reserved for subscription by clients of the Joint Lead Managers, NZX Firms and other approved financial
intermediaries invited to participate in the bookbuild.
ISINNZMCYDG003C8
QuotationApplication has been made to NZX for permission to quote the Green Bonds on the NZX Debt Market and
all the requirements of NZX relating to that quotation that can be complied with on or before the date of
distribution of the PDS have been duly complied with. However, the Green Bonds have not yet been approved
for trading and NZX accepts no responsibility for any statement in the PDS. NZX is a licensed market
operator, and the NZX Debt Market is a licensed market under the FMCA.
NZX ticker code MCY030 has been reserved for the Green Bonds.
Minimum application
amount
$5,000 and multiples of $1,000 thereafter.
Arranger & Green Bond
Co-ordinator
ANZ Bank New Zealand Limited (ANZ)
Joint Lead ManagersANZ, Bank of New Zealand, Craigs Investment Partners Limited and Forsyth Barr Limited
Bond SupervisorThe New Zealand Guardian Trust Company Limited
Securities RegistrarComputershare Investor Services Limited
Governing LawNew Zealand
Further payments, fees or
charges
Taxes may be deducted from interest payments on the Green Bonds.
You are not required to pay brokerage or any other fees or charges to Mercury to purchase the Green Bonds.
However, you may have to pay brokerage to the firm from whom you receive an allocation of Green Bonds.
Please contact your financial adviser for further information on any brokerage fees.

Opening DateMonday 31 August 2020
Closing DateFriday 4 September 2020 at 12.00pm
Rate Set DateFriday 4 September 2020
Issue Date and allotment
date
Monday 14 September 2020
Expected quotation on NZX
Debt Market
Tuesday 15 September 2020
Selling RestrictionsThe Green Bonds may only be offered or sold in conformity with all applicable laws and regulations in New
Zealand and in any other jurisdiction in which the Green Bonds are offered, sold or delivered. Specific selling
restrictions as of the date of the PDS are set out in Schedule 2 to this Terms Sheet for the United States,
Australia, Hong Kong, Japan, Singapore, the United Kingdom, and Switzerland.
No action has been or will be taken by Mercury which would permit an offer of Green Bonds, or possession
or distribution of any offering material, in any country or jurisdiction where action for that purpose is required
(other than New Zealand).
No person may purchase, offer, sell, distribute or deliver Green Bonds, or have in their possession, publish,
deliver or distribute to any person, any offering material or any documents in connection with the Green
Bonds, in any jurisdiction other than in compliance with all applicable laws and regulations and the specific
selling restrictions set out in Schedule 2 to this Terms Sheet.
By subscribing for Green Bonds, you indemnify Mercury, the Arranger, the Joint Lead Managers, the
Registrar and the Bond Supervisor in respect of any loss incurred as a result of you breaching these selling
restrictions.
Important Dates
The timetable is indicative only and subject to change. Mercury may, in its absolute discretion and without notice, vary the timetable
(including by opening or closing the offer early, accepting late applications and extending the Closing Date).
If the Closing Date is extended, the Rate Set Date, the Issue Date, the expected date of initial quotation and trading of the Green Bonds
on the NZX Debt Market, the Interest Payment Dates and the Maturity Date may also be extended. Any such changes will not affect the
validity of any applications received.
Mercury reserves the right to cancel the offer and the issue of the Green Bonds, in which case any application monies received will be
refunded (without interest) as soon as practicable and in any event within 5 Business Days of the cancellation.
Capitalised terms used but not defined in this Terms Sheet have the meanings given to them in the PDS.

The certification of the Green Bonds as
Climate Bonds by the Climate Bonds Initiative
is based solely on the Climate Bond Standard
and does not, and is not intended to, make any
representation or give any assurance with
respect to any other matter relating to the
Green Bonds or any Eligible Project, including
but not limited to the Terms Sheet, the
transaction documents, Mercury or the
management of Mercury.
The certification of the Green Bonds as
Climate Bonds by the Climate Bonds Initiative
was addressed solely to the board of directors
of Mercury and is not a recommendation to
any person to purchase, hold or sell the Green
Bonds and such certification does not address
the market price or suitability of the Green
Bonds for a particular investor. The
certification also does not address the merits
of the decision by Mercury or any third party to
participate in any Eligible Project and does not
express and should not be deemed to be an
expression of an opinion as to Mercury or any
aspect of any Eligible Project (including but
not limited to the financial viability of any
Eligible Project) other than with respect to
conformance with the Climate Bond Standard.
In issuing or monitoring, as applicable, the
certification, the Climate Bonds Initiative has
assumed and relied upon and will assume and
rely upon the accuracy and completeness in
all material respects of the information
supplied or otherwise made available to the
Climate Bonds Initiative. The Climate Bonds
Initiative does not assume or accept any
responsibility to any person for independently
verifying (and it has not verified) such
information or to undertake (and it has not
undertaken) any independent evaluation of
any Eligible Project or Mercury. In addition, the
Climate Bonds Initiative does not assume any
obligation to conduct (and it has not
conducted) any physical inspection of any
Eligible Project. The certification may only be
used with the Green Bonds and may not be
used for any other purpose without the
Climate Bonds Initiative’s prior written consent.
The certification does not and is not in any way
intended to address the likelihood of timely
payment of interest when due on the Green
Bonds and/or the payment of principal at
maturity or any other date.
The certification may be withdrawn at any
time in the Climate Bonds Initiative’s sole and
absolute discretion and there can be no
assurance that such certification will not be
withdrawn.

GENERAL
The Green Bonds may only be offered or sold
in conformity with all applicable laws and
regulations in New Zealand and in any other
jurisdiction in which the Green Bonds are
offered, sold or delivered. Specific selling
restrictions as of the date of this Terms Sheet
are set out below for the United States,
Australia, Hong Kong, Japan, Singapore, the
United Kingdom and Switzerland.
No action has been or will be taken by Mercury
which would permit an offer of Green Bonds,
or possession or distribution of any offering
material, in any country or jurisdiction where
action for that purpose is required (other than
New Zealand).
No person may purchase, offer, sell, distribute
or deliver Green Bonds, or have in their
possession, publish, deliver or distribute to any
person, any offering material or any
documents in connection with the Green
Bonds, in any jurisdiction other than in
compliance with all applicable laws and
regulations and the specific selling restrictions
set out below. Only the Joint Lead Managers
may distribute the PDS and this Terms Sheet
outside New Zealand and only in compliance
with the specific selling restrictions set out
below. In particular, the PDS and this Terms
Sheet may not be distributed to any person in
the United States and the Green Bonds may
not be offered or sold, directly or indirectly, to
any person in the United States.
By subscribing for Green Bonds, you indemnify
Mercury, the Arranger, the Joint Lead
Managers, the Securities Registrar and the
Bond Supervisor in respect of any loss incurred
as a result of you breaching these selling
restrictions.
UNITED S TATES
The Green Bonds have not been, and will not
be, registered under the Securities Act of 1933,
as amended (Securities Act) and may not be
offered or sold within the United States or to,
or for the account or benefit of, U.S. persons
(as defined in Regulation S under the
Securities Act (Regulation S)) except in
accordance with Regulation S or pursuant to
an exemption from, or in a transaction not
subject to, the registration requirements of the
Securities Act.
The Green Bonds will not be offered or sold
within the United States or to, or for the
account or benefit of, U.S. persons (i) as part
of their distribution at any time, or (ii)
otherwise until 40 days after the completion of
the distribution of all Green Bonds, as
determined and certified by the Joint Lead
Managers except in accordance with Rule 903
of Regulation S. Any Green Bonds sold to any
distributor, dealer or person receiving a selling
concession, fee or other remuneration during
the distribution compliance period require a
confirmation or notice to the purchaser at or
prior to the confirmation of the sale to
substantially the following effect:
“The Green Bonds covered hereby have not
been registered under the United States
Securities Act of 1933, as amended (the
Securities Act) or with any securities regulatory
authority of any state or other jurisdiction of
the United States and may not be offered or
sold within the United States, or to or for the
account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii) otherwise
until 40 days after the later of the
commencement of the offering of the Green
Bonds and the closing date except in either
case pursuant to a valid exemption from
registration in accordance with Regulation S
under the Securities Act. Terms used above
have the meaning given to them by
Regulation S.”
Until 40 days after the completion of the
distribution of all Green Bonds, an offer or sale
of the Green Bonds within the United States by
any Joint Lead Manager or any dealer or other
distributor (whether or not participating in the
offering) may violate the registration
requirements of the Securities Act if such offer
or sale is made otherwise than in accordance
with Regulation S.
AUSTRALIA
The PDS, this Terms Sheet and the offer of
Green Bonds are only made available in
Australia to persons to whom an offer of
securities can be made without disclosure in
accordance with applicable exemptions in
sections 708(8) (sophisticated investors) or
708(11) (professional investors) of the
Australian Corporations Act 2001 (the
Corporations Act). The PDS and this Terms
Sheet are not a prospectus, product disclosure
statement or any other formal “disclosure
document” for the purposes of Australian law
and is not required to, and does not, contain all
the information which would be required in a
"disclosure document" under Australian law.
The PDS and this Terms Sheet have not been
and will not be lodged or registered with the
Australian Securities & Investments
Commission or the Australian Securities
Exchange and the issuer is not subject to the
continuous disclosure requirements that apply
in Australia.
Prospective investors should not construe
anything in the PDS or this Terms Sheet as
legal, business or tax advice nor as financial
product advice for the purposes of Chapter 7
of the Corporations Act. Investors in Australia
should be aware that the offer of Green Bonds
for resale in Australia within 12 months of their
issue may, under section 707(3) of the
Corporations Act, require disclosure to investors
under Part 6D.2 if none of the exemptions in
section 708 of the Corporations Act apply to
the re-sale.
SCHEDULE 1
CBI DISCLAIMER
SCHEDULE 2
SELLING RESTRICTIONS

HONG KONG
WARNING: The PDS and this Terms Sheet
have not been, and will not be, registered as a
prospectus under the Companies (Winding Up
and Miscellaneous Provisions) Ordinance (Cap.
32) of Hong Kong, nor has it been authorised
by the Securities and Futures Commission in
Hong Kong pursuant to the Securities and
Futures Ordinance (Cap. 571) of the Laws of
Hong Kong (the SFO). No action has been
taken in Hong Kong to authorise or register the
PDS or this Terms Sheet or to permit the
distribution of the PDS or this Terms Sheet or
any documents issued in connection with
them. Accordingly, the Green Bonds have not
been and will not be offered or sold in Hong
Kong other than to "professional investors" (as
defined in the SFO and any rules made under
that ordinance).
No advertisement, invitation or document
relating to the Green Bonds has been or will be
issued, or has been or will be in the possession
of any person for the purpose of issue, in Hong
Kong or elsewhere that is directed at, or the
contents of which are likely to be accessed or
read by, the public of Hong Kong (except if
permitted to do so under the securities laws of
Hong Kong) other than with respect to Green
Bonds that are or are intended to be disposed
of only to persons outside Hong Kong or only
to professional investors. No person allotted
Green Bonds may sell, or offer to sell, such
securities in circumstances that amount to an
offer to the public in Hong Kong within six
months following the date of issue of such
securities.
The contents of the PDS and this Terms Sheet
have not been reviewed by any Hong Kong
regulatory authority. You are advised to exercise
caution in relation to the Offer. If you are in
doubt about any contents of the PDS or this
Terms Sheet, you should obtain independent
professional advice.
JAPAN
The Green Bonds have not been and will not
be registered under Article 4, paragraph 1 of
the Financial Instruments and Exchange Law
of Japan (Law No. 25 of 1948), as amended
(the FIEL) pursuant to an exemption from the
registration requirements applicable to a
private placement of securities to Qualified
Institutional Investors (as defined in and in
accordance with Article 2, paragraph 3 of the
FIEL and the regulations promulgated
thereunder). Accordingly, the Green Bonds
may not be offered or sold, directly or indirectly,
in Japan or to, or for the benefit of, any
resident of Japan other than Qualified
Institutional Investors. Any Qualified
Institutional Investor who acquires Green
Bonds may not resell them to any person in
Japan that is not a Qualified Institutional
Investor, and acquisition by any such person of
Green Bonds is conditional upon the execution
of an agreement to that effect.
SINGAPORE
SINGAPORE SECURITIES AND FUTURES
ACT PRODUCT CLASSIFICATION: Solely for
the purposes of sections 309B(1)(a) and
309B(1)(c) of the Securities and Futures Act
(Chapter 289 of Singapore) (the S FA), Mercury
has determined, and hereby notifies all
relevant persons (as defined in Section 309A
of the SFA) that the Green Bonds are
“prescribed capital markets products” (as
defined in the Securities and Futures (Capital
Markets Products) Regulations 2018).
The PDS, this Terms Sheet and any other
materials relating to the Green Bonds have not
been, and will not be, lodged or registered as a
prospectus in Singapore with the Monetary
Authority of Singapore. Accordingly, the PDS,
this Terms Sheet and any other document or
materials in connection with the offer or sale,
or invitation for subscription or purchase, of
Green Bonds, may not be issued, circulated or
distributed, nor may the Green Bonds be
offered or sold, or be made the subject of an
invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore
except pursuant to and in accordance with
exemptions in Subdivision (4) Division 1, Part
XIII of the SFA, or as otherwise pursuant to,
and in accordance with the conditions of any
other applicable provisions of the SFA.
This Terms Sheet has been given to you on the
basis that you are (i) an "institutional investor"
(as defined in the SFA) or (ii) an "accredited
investor" (as defined in the SFA). In the event
that you are not an investor falling within any
of the categories set out above, please return
this Terms Sheet immediately. You may not
forward or circulate this Terms Sheet to any
other person in Singapore.
Any offer is not made to you with a view to the
Green Bonds being subsequently offered for
sale to any other party. There are on-sale
restrictions in Singapore that may be
applicable to investors who acquire Green
Bonds. As such, investors are advised to
acquaint themselves with the SFA provisions
relating to resale restrictions in Singapore and
comply accordingly.
UNITED KINGDOM
None of the PDS, this Terms Sheet or any other
document relating to the Offer has been
delivered for approval to the Financial Conduct
Authority in the United Kingdom and no
prospectus (within the meaning of section 85
of the Financial Services and Markets Act
2000, as amended (FSMA)) has been
published or is intended to be published in
respect of the Green Bonds.
The Green Bonds may not be offered or sold
in the United Kingdom by means of the PDS,
this Terms Sheet or any other document,
except in circumstances that do not require
the publication of a prospectus under section
86(1) of the FSMA. This Terms Sheet is issued
on a confidential basis in the United Kingdom
to "qualified investors" (within the meaning of
Article 2(e) of the Prospectus Regulation
(2017/1129/EU), replacing section 86(7) of the
FSMA). This Terms Sheet may not be
distributed or reproduced, in whole or in part,
nor may its contents be disclosed by recipients
to any other person in the United Kingdom.
Any invitation or inducement to engage in
investment activity (within the meaning of
section 21 of the FSMA) received in connection
with the issue or sale of the Green Bonds has
only been communicated or caused to be
communicated and will only be
communicated or caused to be
communicated in the United Kingdom in
circumstances in which section 21(1) of the
FSMA does not apply to Mercury.
In the United Kingdom, this Terms Sheet is
being distributed only to, and is directed at,
persons (i) who have professional experience
in matters relating to investments falling within
Article 19(5) (investment professionals) of the
Financial Services and Markets Act 2000
(Financial Promotions) Order 2005 (FPO), (ii)
who fall within the categories of persons
referred to in Article 49(2)(a) to (d) (high net
worth companies, unincorporated associations,
etc.) of the FPO or (iii) to whom it may
otherwise be lawfully communicated (together
relevant persons). The investment to which
this Terms Sheet relates is available only to
relevant persons. Any person who is not a
relevant person should not act or rely on the
PDS or this Terms Sheet.
SWITZERLAND
The Green Bonds may not be publicly offered
in Switzerland and will not be listed on the SIX
Swiss Exchange or on any other stock
exchange or regulated trading facility in
Switzerland. None of the PDS, this Terms
Sheet or any other offering or marketing
material relating to the Green Bonds
constitutes a prospectus or a similar notice, as
such terms are understood under art. 35 of
the Swiss Financial Services Act (FinSA) or the
listing rules of any stock exchange or regulated
trading facility in Switzerland.
No offering or marketing material relating to
the Green Bonds has been, nor will be, filed
with or approved by any Swiss regulatory
authority or authorised review body. In
particular, the PDS and this Terms Sheet will
not be filed with, and the offer of Green Bonds
will not be supervised by, the Swiss Financial
Market Supervisory Authority.
None of the PDS, this Terms Sheet or any other
offering or marketing material relating to the
Green Bonds may be publicly distributed or
otherwise made publicly available in
Switzerland. The Green Bonds will only be
offered to investors who qualify as
"professional clients" (as defined in the FinSA).
This Terms Sheet is personal to the recipient
and not for general circulation in Switzerland.