S&P's view on Genesis's new bonds
The bonds are intended to partly fund the acquisition of the Tekapo A and B hydro assets.
The international ratings agency rates Genesis itself "BBB+" but has it on negative watch.
"We classified the capital bonds as having a "high" equity content, meaning that we will treat the bonds entirely as "equity" and the coupon payments as "dividends" in our financial ratio calculations, says credit analyst Alicia Low.
Key features of the bonds include the mandatory deferral of coupon payments for up to five years if Genesis' rating falls to "BB+" or below. They will also rank behind all senior unsecured creditors including Genesis' existing retail bonds, medium-term notes and bank debt.
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