Mercury Launches Capital Bond Offer

`
The Mercury Building, 33 Broadway, Newmarket 1023



mercury.co.nz
PO Box 90399, Auckland 1142






STOCK EXCHANGE LISTINGS: NZX (MCY) / ASX (MCY)

NEWS RELEASE

MERCURY LAUNCHES CAPITAL BOND OFFER

24 June 2024

Mercury NZ Limited (Mercury) confirmed today that it is offering up to $300 million (with the ability to accept up to
an additional $50 million in oversubscriptions at Mercury’s discretion) of unsecured, subordinated capital bonds
(Capital Bonds) to institutional investors and New Zealand retail investors.
The offer opens today and is expected to close on 27 June 2024, with the Capital Bonds expected to be issued on
11 July 2024.
The indicative margin range for the Capital Bonds to the First Reset Date (11 July 2029) is 2.00% to 2.15% per
annum (subject to a minimum interest rate of 6.15% per annum). An announcement of the actual margin (which
may be above or below the indicative margin range) and interest rate to the First Reset Date will be made following
a bookbuild process, expected to be completed on 27 June 2024 and announced via NZX shortly thereafter.
The Capital Bonds are expected to be rated BB+ by S&P Global Ratings.
If the bookbuild for the offer is successful, Mercury will exercise its option to redeem its unsecured subordinated
capital bonds which are quoted on the NZX Debt Market under the ticker MCY020 (MCY020 Bonds) on the first
reset date for the MCY020 Bonds, being 11 July 2024.
Trading in all MCY020 Bonds will be suspended from close of market on 26 June 2024.
There is no public pool for the offer, with all of the Capital Bonds being reserved for clients of the Joint Lead
Managers, NZX participants and other approved financial intermediaries.
The offer is made pursuant to the Financial Markets Conduct Act 2013 as an offer of debt securities of the same
class as existing quoted debt securities. The Capital Bonds are expected to be quoted on the NZX Debt Market.
Full details of the offer are contained in the indicative terms sheet, which is available at www.mercury.co.nz/capital-
bonds or by contacting a Joint Lead Manager or your usual financial adviser.
Copies of the indicative terms sheet and investor presentation have also been provided to NZX with this
announcement.

Joint Lead Managers


0800 284 017 0800 226 263 0800 367 227

ENDS
Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited


For investor relations queries, please contact:
Paul Ruediger
Head of Business Performance & Investor Relations
027 517 3470
investor@mercury.co.nz
For media queries, please contact:
Shannon Goldstone
Reputation and Social Impact Lead
027 210 5337
mercurycommunications@mercury.co.nz


ABOUT MERCURY NZ LIMITED
Mercury generates electricity from 100% renewable sources: hydro, geothermal and wind. We are also a retailer of
electricity, gas, broadband and mobile services. We’re listed on the New Zealand Stock Exchange and the
Australian Stock Exchange with the ticker symbol ‘MCY’, with foreign exempt listed status. The New Zealand
Government holds a legislated minimum 51% shareholding in the Company.
Visit us at: www.mercury.co.nz

---

CAPITAL BONDS 20241
INDICATIVE
TERMS SHEET.
Arranger and
Joint Lead
Manager.
CAPITAL BONDS 2024.
Joint Lead
Managers.

CAPITAL BONDS 20242
Dated 24 June 2024.
This indicative terms sheet (“Terms Sheet”) sets out the key
terms of the offer (“Offer”) by Mercury NZ Limited (“Mercury”) of
up to NZ$300 million (with the ability to accept oversubscriptions
of up to an additional NZ$50 million at Mercury’s discretion) of
unsecured, subordinated, interest bearing capital bonds maturing
on 11 July 2054 (“Capital Bonds”) under its master trust deed
dated 4 April 2003 (as amended from time to time) (“Master
Trust Deed”) as modified and supplemented by the supplemental
trust deed dated 24 June 2024 (together, “Trust Documents”)
entered into between Mercury and The New Zealand Guardian
Trust Company Limited as supervisor (“Supervisor”). Unless
the context otherwise requires, capitalised terms used in this
Terms Sheet have the same meaning given to them in the
Trust Documents.
Important Notice
The Offer of Capital Bonds by Mercury is made in reliance upon
the exclusion in clause 19 of schedule 1 of the Financial Markets
Conduct Act 2013 (“FMCA”).
The Offer contained in this Terms Sheet is an offer of debt
securities that have identical rights, privileges, limitations and
conditions (except for the interest rate and maturity date) as:
• Mercury’s NZ$300 million unsecured, subordinated, interest
bearing capital bonds with an interest rate of 3.60% per annum
and a final maturity date of 11 July 2049, which are currently
quoted on the NZX Debt Market under the ticker code MCY020
(“MCY020 Bonds”); and
• Mercury’s NZ$250 million unsecured, subordinated, interest
bearing capital bonds with an interest rate of 5.73% per annum
and a final maturity date of 13 May 2052, which are currently
quoted on the NZX Debt Market under the ticker code MCY050
(“MCY050 Bonds”).
Accordingly, the Capital Bonds are the same class as the MCY020
Bonds and MCY050 Bonds for the purposes of the FMCA and the
Financial Markets Conduct Regulations 2014.
Mercury is subject to a disclosure obligation that requires it to
notify certain material information to NZX Limited (“NZX”) for the
purpose of that information being made available to participants
in the market and that information can be found by visiting
www.nzx.com/companies/MCY.
The MCY020 Bonds and MCY050 Bonds are the only debt
securities of Mercury that are in the same class as the Capital
Bonds and are currently quoted on the NZX Debt Market.
Investors should look to the market price of the MCY020 Bonds
and MCY050 Bonds referred to above to find out how the market
assesses the returns and risk premium for those bonds. When
comparing yield of different debt securities, it is important to
consider all relevant factors (including rating (if any), maturity and
other terms of the relevant debt securities).
Investors should carefully consider the features of the Capital
Bonds which differ from the features of a standard senior bond.
Those features include the ability of Mercury to defer interest,
optional redemption rights for Mercury, a margin step-up and
the subordinated nature of the Capital Bonds. Investors should
read this Terms Sheet carefully (including the risks discussed on
page 10) and seek financial advice before deciding to invest in the
Capital Bonds.
Redemption of the MCY020 Bonds
The first reset date for the MCY020 Bonds is 11 July 2024 and
Mercury has the right to redeem the MCY020 Bonds on that date.
If the bookbuild process for the Offer is successful, Mercury will
redeem the MCY020 Bonds by giving a redemption notice to
holders of MCY020 Bonds (“MCY020 Bondholders”) on the Rate
Set Date (27 June 2024).
INDICATIVE TERMS SHEET.

CAPITAL BONDS 20243
IssuerMercury NZ Limited
DescriptionThe Capital Bonds are unsecured, subordinated, redeemable, cumulative, interest bearing
debt securities.
RankingThe Capital Bonds will rank equally among themselves and will be subordinated to all other
indebtedness of Mercury, other than indebtedness expressed to rank equally with, or subordinate to,
the Capital Bonds. The Capital Bonds rank equally with the MCY050 Bonds.
See Ranking on Liquidation on page 6.
PurposeThe proceeds of the Offer are intended to be applied to the repayment of existing debt
(including the MCY020 Bonds) and for general corporate purposes.
No guaranteeMercury is the issuer and the sole obligor in respect of the Capital Bonds. None of the Crown, any
subsidiary of Mercury or any other person guarantees the Capital Bonds.
Further indebtednessMercury may incur finance debt without the consent of holders of Capital Bonds (“Bondholders”).
Equity contentS&P Global Ratings is expected to assign “intermediate equity content” to the Capital Bonds. Where
such equity credit content is assigned, S&P Global Ratings will consider that the Capital Bonds
comprise 50% equity when calculating its financial ratios for Mercury.
The equity content is expected to fall to minimal (0%) on 11 July 2034.
Capital structureMercury believes that hybrid securities such as the Capital Bonds that are ascribed equity content are
an effective capital management tool and intends to maintain such instruments as a key feature of
its capital structure going forward.
Credit rating
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 New Zealand government.
The New Zealand government does not guarantee the Capital Bonds and is under no obligation to
provide financial support to Mercury.
The expected Issue Credit Rating of the Capital Bonds is two notches below Mercury’s stand-alone
credit profile. One notch is deducted for the Capital Bonds being subordinated and a second notch
because of the potential for interest payments to be deferred.
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 Capital Bonds.
The above Issuer Credit Rating is current as at the date of this Terms Sheet and any credit rating may
be subject to suspension, revision or withdrawal at any time by S&P Global Ratings.
OfferMercury is offering up to NZ$300 million (with the ability to accept oversubscriptions of up to an
additional NZ$50 million at Mercury’s discretion) of Capital Bonds to New Zealand retail and certain
institutional investors.
The Offer will be conducted on a firm allocation basis as described in more detail below under the
headings Who may apply for Capital Bonds and How to apply.
Issuer Credit RatingExpected Issue Credit Rating
S&P Global RatingsBBB+ (Stable)BB+

CAPITAL BONDS 20244
Term30 years (maturing 11 July 2054) unless redeemed earlier.
Redemption of
MCY020 Bonds if the
Offer is successful
Subject to the bookbuild for the Offer being successful, Mercury will issue a redemption notice in
respect of the MCY020 Bonds on 27 June 2024 in order to redeem the MCY020 Bonds on 11 July
2024. Each MCY020 Bond will be redeemed at par ($1.00) plus all accrued but unpaid interest.
MCY020 Bondholders who wish to participate in the Offer and invest in the new Capital Bonds should
contact their usual financial adviser, one of the Joint Lead Managers or another Market
Participant – see the sections below titled Who may apply for Capital Bonds and How to
apply for further information.
Custodial MCY020 Bondholders who receive an allocation may be able to use a set-off option for
settlement, and should contact their custodian for further details.
Issue Price and
Principal Amount
NZ$1.00 per Capital Bond.
Interest Rate from the
Issue Date to the First
Reset Date
The percentage per annum equal to the Benchmark Rate (determined on the Rate Set Date) plus the
Margin, but subject to a minimum Interest Rate of 6.15% per annum for this period.
Benchmark RateThe mid market NZD swap rate for a 5-year term, determined according to market convention on the
Rate Set Date (commencing from the Issue Date) and at or around 11.00am New Zealand time on
each Reset Date, in each case, with reference to Bloomberg page ‘ICNZ4’ (or any successor page) and
expressed on a quarterly basis (rounded to two decimal places, if necessary, with 0.005 rounded up).
MarginThe indicative Margin range is 2.00% to 2.15% per annum for the Capital Bonds.
The actual Margin for the Capital Bonds (which may be above or below the indicative Margin range
mentioned above) will be set by Mercury (in consultation with the Joint Lead Managers) on the Rate
Set Date following a bookbuild conducted by the Joint Lead Managers and will be announced by
Mercury via NZX on the Rate Set Date.
Payment of interestInterest will be payable on an Interest Payment Date to the Bondholder as at the Record Date
immediately preceding the relevant Interest Payment Date.
Interest Payment
Dates
Interest shall be paid quarterly in arrear on 11 January, 11 April, 11 July and 11 October of each year.
Interest accrues on the Capital Bonds until (but excluding) the date on which they are redeemed.
The first interest payment date is 11 October 2024.
Interest may be deferred at the option of Mercury – see Discretionary deferral of interest below.
Record DateIn relation to payments of interest, the date which is 10 calendar days before the due date for the
payment. In relation to an Election Process (as defined below), the date which is two Business Days
prior to the date on which the applicable Election Notice (as defined below) is given. In either case, if
that date is not a Business Day, the Record Date will be the preceding Business Day.
Reset DatesThe First Reset Date for the Capital Bonds is the date that is five years after the Issue Date (11 July
2029). Thereafter there is a further Reset Date every five years. As part of a Successful Election
Process, a different Reset Date may be adopted.
Interest Rate after
each Reset Date
The Interest Rate applying from each Reset Date up to but excluding the next Reset Date will be
the percentage per annum equal to the then Benchmark Rate on that Reset Date plus the Margin,
plus the Step-up Margin. If a Successful Election Process has been completed, the Interest Rate after
each Reset Date will be as set out in the relevant Election Notice (as defined below).
Step-up Margin0.25%

CAPITAL BONDS 20245
Discretionary deferral
of interest
Mercury may defer payment of interest on the Capital Bonds at any time for up to five years at its sole
discretion by notifying Bondholders. If an interest payment is not paid on its due date, notice of its
deferral is deemed to be given.
If deferred, an interest payment amount will itself accrue interest (compounding on each
Interest Payment Date) at the prevailing Interest Rate on the Capital Bonds (in aggregate,
the “Unpaid Interest”).
Unpaid Interest is cumulative.
See Deferral of interest payments under the “Risks” section on page 10.
Distribution stopperWhilst there is any Unpaid Interest outstanding Mercury shall not:
(i) make any dividends, distributions or payments of interest on any shares or securities ranking
pari passu with or below the Capital Bonds; or
(ii) acquire, redeem or repay any share or other security ranking pari passu with or below the
Capital Bonds (or provide financial assistance for the acquisition of such shares or securities),
(together, the “Restrictions on Deferral”).
Election ProcessNo earlier than six months and not later than 20 Business Days before any Reset Date, Mercury may
give to each Bondholder a notice (“Election Notice”) specifying new terms and conditions (“New
Conditions”) (including for example a new Margin) proposed to apply from the next Reset Date.
Bondholders can elect to accept or reject the New Conditions. Bondholders who do not respond will
be deemed to have accepted the New Conditions.
If Mercury declares a Successful Election Process then it is obliged to purchase any Capital Bonds
held by a Bondholder who has rejected the New Conditions. Mercury may choose to establish a resale
facility (“Resale Facility”) to seek buyers for those Capital Bonds.
If Mercury does not wish to purchase all Capital Bonds from those Bondholders that have rejected
the New Conditions then Mercury must declare that the Election Process has failed, in which case the
existing terms and conditions will continue to apply and all Capital Bonds will remain outstanding.
Optional early
redemption by
Mercury
Mercury may redeem:
(i) all or some of the Capital Bonds on any Reset Date;
(ii) all or some of the Capital Bonds on any Interest Payment Date after a Reset Date if a
Successful Election Process has not been undertaken in respect of that Reset Date;
(iii) all (but not some only) of the Capital Bonds if there are less than 100,000,000 Capital Bonds
on issue;
(iv) all or some of the Capital Bonds if a Tax Event (as defined below) occurs; or
(v) all or some of the Capital Bonds if a Rating Agency Event (as defined below) occurs.
The Redemption Price will be:
(a) the Issue Price of the Capital Bonds plus Unpaid Interest plus any Interest Payment scheduled
to be paid on the date of redemption; or
(b) if the redemption occurs pursuant to paragraph (ii) or (v) immediately above, the higher of:
(1) the amount calculated under paragraph (a) immediately above; and
(2) the market value of the Capital Bonds together with accrued interest.
If Mercury is redeeming Capital Bonds in part only then it can only do so to the extent that there
will be at least 100,000,000 Capital Bonds outstanding after the partial redemption. Any partial
redemption will be done on a proportionate basis and may include adjustments to take account of
the effect on marketable parcels and other logistical considerations.
Tax EventReceipt by Mercury of an opinion from a reputable legal counsel or tax adviser that as a result of an
amendment, change or clarification of legislation, regulation, etc. the interest payments on the Capital
Bonds would no longer be fully deductible for tax purposes.

CAPITAL BONDS 20246
Rating Agency EventReceipt by Mercury of notice from S&P Global Ratings that, as a result of a change of criteria, the
Capital Bonds will no longer have the same equity content classification from S&P Global Ratings as it
had immediately prior to the change in criteria, or Mercury ceasing to hold a credit rating.
Events of DefaultThe following Events of Default will result in the Capital Bonds becoming immediately redeemable:
(i) failure to pay any Unpaid Interest by the fifth anniversary of its original deferral;
(ii) failure to comply with the Restrictions on Deferral;
(iii) failure to pay amounts required to be paid on the redemption of the Capital Bonds;
(iv) failure to pay amounts required to be paid in connection with a Successful Election Process; or
(v) an insolvency event of Mercury occurs.
Ranking on liquidationOn a liquidation of Mercury amounts owing to Bondholders rank equally with all other unsecured,
subordinated obligations of Mercury. The Capital Bonds rank behind Mercury’s bank debt, senior
bonds (including senior green bonds), commercial paper, US private placement notes and any
amounts owing to unsubordinated general and trade creditors, as well as indebtedness preferred
by law and secured indebtedness. The ranking of the Capital Bonds on a liquidation of Mercury is
summarised in the diagram below.
Ranking on
liquidation
Type of liability/equityIndicative amount
1
Higher ranking
/ earlier priority
Liabilities that
rank above the
Capital Bonds
Liabilities preferred by law
(for example, Inland Revenue
for certain unpaid taxes),
unsubordinated creditors
(including banks and financial
institutions that have lent
money to Mercury, holders
of Mercury’s senior bonds
(including senior green
bonds), holders of Mercury’s
commercial paper, holders of
Mercury’s US private placement
notes and unsubordinated trade
and general creditors)
NZ$4,087 million
2
Liabilities that
rank equally
with the Capital
Bonds
The Capital Bonds
The MCY050 Bonds and any
other subordinated obligations
of Mercury
NZ$350 million
NZ$250 million
Lower ranking
/ later priority
EquityOrdinary shares, reserves and
retained earnings
NZ$4,800 million
See notes on the next page.

CAPITAL BONDS 20247
Notes:
1. Amounts shown above are indicative based on the financial position of the Mercury consolidated
group as at 31 December 2023. They are adjusted for the issue of the Capital Bonds, based on
an issue size of NZ$350 million, and exclude the MCY020 Bonds which will be redeemed in full
if the bookbuild for the Offer is successful. If a lower amount of Capital Bonds is issued, then
a corresponding higher amount of additional unsubordinated bank debt is expected to remain
outstanding. The actual amounts of liabilities and equity of Mercury at the point of its liquidation
will be different to the indicative amounts set out in the diagram above. Amounts above are
subject to rounding adjustments.
2. This represents the total liabilities of the Mercury consolidated group (other than the MCY020
Bonds and MCY050 Bonds) as at 31 December 2023, adjusted for the issue of Capital Bonds as
described in note 1. It includes amounts corresponding to deferred tax (approximately NZ$1,722
million), derivative financial instruments (approximately NZ$494 million) and lease liabilities
(approximately NZ$121 million) not all of which would be crystallised on liquidation. Such
liabilities on liquidation may be materially different.
Minimum application
amount and minimum
holding
Minimum of NZ$5,000 with multiples of NZ$1,000 thereafter.
Transfer restrictionsAs a Bondholder, you may only transfer Capital Bonds if the transfer is in respect of Capital Bonds
having an aggregate Principal Amount that is an integral multiple of NZ$1,000. However, Mercury will
not register any transfer of Capital Bonds if the transfer would result in the transferor or the transferee
holding or continuing to hold Capital Bonds with an aggregate Principal Amount of less than
NZ$5,000, unless the transferor would then hold no Capital Bonds.
NZX Debt Market
quotation
It is a term of the Offer of the Capital Bonds that Mercury take any necessary steps to ensure that the
Capital Bonds are quoted immediately following the Issue Date. Application has been made to NZX
for permission to quote the Capital Bonds on the NZX Debt Market and all the requirements of NZX
relating thereto that can be complied with on or before the distribution of this Terms Sheet have been
duly complied with. However, NZX accepts no responsibility for any statement in this Terms Sheet.
NZX is a licensed market operator, and the NZX Debt Market is a licensed market under the FMCA.
Expected date of
initial quotation and
trading on the NZX
Debt Market
12 July 2024
NZX Debt Market
ticker code
MCY070
ISINNZMCYDG007C9
Business DaysA day (other than a Saturday or Sunday) on which banks are generally open for business in Auckland
and Wellington.
If an Interest Payment Date, redemption date or the Maturity Date falls on a day that is not a Business
Day, the due date for any payment to be made on that date will be the next following Business Day.
Governing lawNew Zealand

CAPITAL BONDS 20248
Who may apply for
Capital Bonds
All of the Capital Bonds offered under the Offer (including any oversubscriptions) will be reserved for
clients of the Joint Lead Managers, institutional investors and other Market Participants invited to
participate in the bookbuild. There will be no public pool.
How to applyRetail investors should contact any Joint Lead Manager, their usual financial adviser or any Market
Participant for details on how they may acquire Capital Bonds. You can find a Market Participant
by visiting www.nzx.com/investing/find-a-participant
Any allotment of the Capital Bonds will be at Mercury’s discretion, in consultation with the Joint
Lead Managers. Mercury reserves the right to refuse all or any part of an application without
giving any reason.
Each investor’s usual financial adviser will be able to advise them as to what arrangements will
need to be put in place for the investors to trade the Capital Bonds including obtaining a common
shareholder number (CSN), an authorisation code (FIN) and opening an account with a Market
Participant as well as the costs and timeframes for putting such arrangements in place.
Registrar and
Paying Agent
Computershare Investor Services Limited
SupervisorThe New Zealand Guardian Trust Company Limited
ArrangerForsyth Barr Limited
Joint Lead ManagersBank of New Zealand, Craigs Investment Partners Limited and Forsyth Barr Limited
FeesApplicants are not required to pay brokerage or any charges to Mercury in relation to applications
under the Offer.
Mercury will pay retail brokerage of 0.50% and firm fees of 0.50% to Market Participants and
approved financial intermediaries (as applicable).
Selling restrictionsThe selling restrictions set out in Schedule 1 to this Terms Sheet apply to the Capital Bonds.
The Capital Bonds must not be offered or sold other than in strict compliance with those
selling restrictions.
By subscribing for Capital Bonds, you indemnify Mercury, the Arranger, the Joint Lead Managers
and the Supervisor in respect of any loss incurred as a result of you breaching the selling restrictions
in Schedule 1.
Non-relianceThis Terms Sheet does not constitute a recommendation by the Arranger, the Joint Lead Managers,
the Supervisor or any of their respective directors, officers, employees, agents or advisers to subscribe
for, or purchase, any of the Capital Bonds. None of these parties or any of their respective directors,
officers, employees, agents or advisers accept any liability whatsoever for any loss arising from this
Terms Sheet or its contents or otherwise arising in connection with the Offer.
The Arranger, the Joint Lead Managers and the Supervisor have not independently verified the
information contained in this Terms Sheet. In accepting delivery of this Terms Sheet, you acknowledge
that none of the Arranger, the Joint Lead Managers, the Supervisor nor their respective directors,
officers, employees, agents or advisers gives any warranty or representation of accuracy or reliability
and they take no responsibility for it. They have no liability for any errors or omissions (including for
negligence) in this Terms Sheet, and you waive all claims in that regard.

CAPITAL BONDS 20249
Opening DateMonday, 24 June 2024
Closing Date11.00am, Thursday, 27 June 2024
Rate Set Date
Thursday, 27 June 2024. The initial Interest Rate and Margin for the Capital Bonds will be set and
announced to the market on this date.
Issue Date / Allotment Date11 July 2024
First Reset Date11 July 2029
Maturity Date11 July 2054
KEY DATES.
The dates set out in this Terms Sheet are indicative only and Mercury, in conjunction with the Joint Lead Managers, may change the dates set out in
this Terms Sheet. Mercury has the right in its absolute discretion and without notice to close the Offer early, to extend the Closing Date or to choose
not to proceed with the Offer. If the Closing Date is extended, subsequent dates may be extended accordingly.

CAPITAL BONDS 202410
An investment in the Capital Bonds is subject to the risks that:
(i) Mercury becomes insolvent and is unable to meet its obligations
under the Capital Bonds; and/or
(ii) if the investor wishes to sell the Capital Bonds before maturity,
the investor is unable to find a buyer or that the amount received is
less than the principal amount paid for the Capital Bonds.
Investors should carefully consider the features of the Capital Bonds
which differ from the features of a standard senior bond. Those
features include the ability of Mercury to defer interest, optional early
redemption rights for Mercury, a margin step-up, an election process
and the subordinated nature of the Capital Bonds. Key risks concerning
those features are set out in detail below.
This summary does not cover all of the risks of investing in the Capital
Bonds. For example, whilst certain risks in relation to the Capital Bonds
are set out in more detail below, those risks relating to Mercury, rather
than the Capital Bonds themselves, are not set out below on the basis
that information relating to Mercury and its operations is already
disclosed to the market pursuant to Mercury’s continuous disclosure
obligations under the NZX Listing Rules. Also, the summary below sets
out the risks in relation to the Capital Bonds that differ from risks in
relation to standard senior bonds. It does not cover the risks that are
common to both the Capital Bonds and standard senior bonds (such
as risks around liquidity and your ability to sell the Capital Bonds at a
given price, or at all).
Investors should carefully consider those risk factors (together with the
other information in this Terms Sheet) before deciding to invest in the
Capital Bonds.
The statement of risks in this Terms Sheet also does not take account
of the personal circumstances, financial position or investment
requirements of any investor. It is important, therefore, that before
making any investment decision, investors give consideration to the
suitability of an investment in the Capital Bonds in light of his or
her individual risk profile for investments, investment objectives and
personal circumstances (including financial and taxation issues).
The interest rate for the Capital Bonds should also reflect the degree of
credit risk. In general, higher returns are demanded by investors from
businesses with higher risk of defaulting on their commitments. You
need to decide whether the Offer of Capital Bonds is fair.
You should speak to your usual financial adviser about the risks
involved with an investment in the Capital Bonds.
DEFERRAL OF INTEREST PAYMENTS.
There is a risk that interest payments on the Capital Bonds will be
deferred by Mercury for a period of up to five years, as described in the
paragraph headed Discretionary deferral of interest on page 5.
Mercury has a broad discretion to defer the payment of interest on
the Capital Bonds, and Bondholders will not have an immediate
redemption right in those circumstances.
REDEMPTION PRIOR TO THE MATURITY DATE.
Although the Capital Bonds have a term of 30 years, Mercury may
choose to redeem the Capital Bonds early in certain circumstances.
Mercury may elect to redeem the Capital Bonds in the circumstances
outlined in the paragraph headed Optional early redemption by
Mercury on page 5. While some of those redemption triggers may
appear to be unlikely to occur, recent history suggests that such events
can occur, and Mercury will have the right to redeem after five years
and on each subsequent Reset Date.
If Mercury is entitled to redeem any of the Capital Bonds, the method
and date by which Mercury elects or is required to do so may not
accord with the preference of individual Bondholders. This may be
disadvantageous in light of market conditions or a Bondholder’s
individual circumstances.
RANKING.
The Capital Bonds rank behind all of Mercury’s unsubordinated
obligations. In a liquidation of Mercury, the holders of the Capital Bonds
would be paid only after all amounts owing by Mercury to its bankers,
holders of senior bonds (including green senior bonds), commercial
paper, holders of US private placement notes, and general and trade
unsubordinated creditors, have been paid. After payment of those
amounts, there may be insufficient funds available to the liquidator to
repay all or any of the amounts owing on the Capital Bonds.
SUPERVISOR’S ENFORCEMENT RIGHTS.
Investors should be aware that even if the right to seek repayment of
the Capital Bonds is exercised following the occurrence of an Event of
Default, the Supervisor has very limited powers to enforce these rights
given the subordinated nature of the Capital Bonds. For example, the
Supervisor has no ability to appoint a receiver with a view to recovering
amounts owing to Bondholders and is only entitled to file a conditional
claim in the event of the liquidation of the Issuer requiring repayment
of the Capital Bonds after all prior ranking indebtedness has been
repaid in full.
RISKS.

CAPITAL BONDS 202411
Copies of the Trust Documents are available at Mercury’s website at
www.mercury.co.nz/MCY070
Any internet site addresses provided in this Terms Sheet are for
reference only and, except as expressly stated otherwise, the content
of any such internet site is not incorporated by reference into, and
does not form part of, this Terms Sheet.
Investors should seek qualified independent financial and taxation
advice before deciding to invest. In particular, you should consult
your tax adviser in relation to your specific circumstances. Investors
will also be personally responsible for ensuring compliance with
relevant laws and regulations applicable to them (including any
required registrations).
For further information regarding Mercury, visit
www.nzx.com/companies/MCY
CO N TAC T D E TAIL S .
Issuer
Mercury NZ Limited
33 Broadway
Newmarket
Auckland 1023
Arranger and Joint Lead Manager
Forsyth Barr Limited
Level 23, Shortland & Fort
88 Shortland Street
Auckland 1010
0800 367 227
Joint Lead Managers
Bank of New Zealand
Level 6, Deloitte Centre
80 Queen Street
Auckland 1010
0800 284 017
Craigs Investment Partners Limited
Level 36, Vero Centre
48 Shortland Street
Auckland 1010
0800 226 263
Supervisor
The New Zealand Guardian Trust Company Limited
Level 14, 191 Queen Street
Auckland 1010
Registrar
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
Private Bag 92119
Auckland 1142
Legal advisers to Mercury
Chapman Tripp
Level 34, PwC Tower
15 Customs Street West
Auckland 1010
OTHER INFORMATION.

CAPITAL BONDS 202412
SCHEDULE 1 – SELLING RESTRICTIONS.
GENERAL.
The Capital 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 Capital Bonds are offered or sold. Applicable
offer restrictions are set out below for the United States, Australia,
Hong Kong, Japan, Singapore and the United Kingdom.
No action has been or will be taken by Mercury which would permit
an offer of Capital 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 Capital Bonds,
or have in their possession, publish, deliver or distribute to any person,
any offering material or any documents in connection with the Capital
Bonds, in any jurisdiction other than in compliance with all applicable
laws and the specific selling restrictions set out below.
By subscribing for Capital Bonds, you indemnify Mercury, the
Arranger, the Joint Lead Managers, the Registrar and the Supervisor
in respect of any loss incurred as a result of any breach by you of
these selling restrictions.
U N IT ED S TAT ES .

The Capital Bonds have not been, and will not be, registered under the
U.S. 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 Capital 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 Capital Bonds of the tranche of
which such Capital Bonds are part, as determined and certified by
the Joint Lead Managers except in accordance with Rule 903 of
Regulation S. Any Capital 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 Capital Bonds have not been, and will not be, 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. Accordingly, the
Capital Bonds 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 Capital
Bonds and the closing date except in either case pursuant to a
valid exemption from registration or 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 Capital
Bonds or the tranche of which those Capital Bonds are a part, an
offer or sale of the Capital 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.
This Terms Sheet and the offer of Capital 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”). This Terms Sheet is 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. This Terms Sheet has not been and will not be lodged
or registered with the Australian Securities & Investments Commission
or the Australian Securities Exchange and Mercury is not subject to the
continuous disclosure requirements that apply in Australia.
Prospective investors should not construe anything in 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 Capital 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.
HONG KONG.
WARNING: This Terms Sheet has 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 this Terms Sheet or to permit the
distribution of this Terms Sheet or any documents issued in connection
with it. Accordingly, the Capital 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 Capital 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 Capital Bonds
that are or are intended to be disposed of only to persons outside Hong
Kong or only to professional investors. No person allotted Capital 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 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 this
Terms Sheet, you should obtain independent professional advice.

CAPITAL BONDS 202413
JAPAN.
The Capital 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 “ F I E L”) 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 Capital
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
Capital Bonds may not resell them to any person in Japan that is not
a Qualified Institutional Investor, and acquisition by any such person
of Capital 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 its obligations
pursuant to sections 309B(1)(a) and 309B(1)(c) of the Securities and
Futures Act 2001 (the “ SFA”), Mercury has determined, and hereby
notifies all relevant persons (as defined in Section 309A of the SFA)
that the Capital Bonds are “prescribed capital markets products”
(as defined in the Securities and Futures (Capital Markets Products)
Regulations 2018).
This Terms Sheet and any other materials relating to the Capital Bonds
have not been, and will not be, lodged or registered as a prospectus in
Singapore with the Monetary Authority of Singapore. Accordingly, this
Terms Sheet and any other document or materials in connection with
the offer or sale, or invitation for subscription or purchase, of Capital
Bonds, may not be issued, circulated or distributed, nor may the Capital
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 13 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 Capital Bonds being
subsequently offered for sale to any other party in Singapore. There are
on-sale restrictions in Singapore that may be applicable to investors
who acquire Capital Bonds. As such, investors are advised to acquaint
themselves with the SFA provisions relating to resale restrictions in
Singapore and comply accordingly.
UNITED KINGDOM.
Neither this Terms Sheet nor 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 Capital Bonds.
The Capital Bonds may not be offered or sold in the United Kingdom
by means of this document 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” (as
defined in Article 2(e) of the UK Prospectus Regulation). This Terms
Sheet should not be distributed, published 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 Capital 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 investments to which this Terms Sheet relates
are available only to relevant persons. Any person who is not a relevant
person should not act or rely on this Terms Sheet.

CAPITAL BONDS 202414

---

•
•

•
•
•
•
•
•
•
•
•

•
•
•
•
•
•

•
•
•
•

•
•

•
•
•

•
•
•
•

•
•
•
•
•
•
•

•
•
•

•
•
•
•

•
•

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•

•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•

•
•
•
•
•
•