The high yield bond market in Australia is set to become a little larger this week. QMS Media (ASX code: QMS) has announced it has finalised the issue of $70 million worth of senior unsecured notes. The outdoor advertiser adds another issuer to a growing list of local companies without credit ratings which have raised funds by issuing high yield bonds in Australia.
The company sought to raise a minimum of $50 million but investor demand led to the issue being upsized to $70 million. The notes have a 7.00% coupon and they will mature on 17 October 2022.
The notes may be called earlier and there are two optional redemption dates; one on 21 November 2020 and the second on 21 November 2021.
On the first optional redemption date or the next interest payment date, QMS may redeem the notes at 102% of face value. On the second optional redemption date or the next interest payment date QMS may redeem the notes at 101% of face value.
It is not uncommon for modest penalties to apply to companies which redeem bonds early. Firstly, investors would need to re-invest the redemption proceeds at a time not of their choosing. Secondly, they would miss out on interest payments for the last year or two of the life of the bonds or notes.