Waivers from NZX Debt Market Listing Rules 5.2.3 and 7.11.1

NZX Regulation Decision Meridian Energy Limited ("MEL") Application for waivers from NZX Debt Market Listing Rules 5.2.3 and 7.11.1 3 March 2017 Background 1. The information on which this decision is based is set out in Appendix One to this decision. These waivers will not apply if that information is not or ceases to be full and accurate in all material respects. 2. The Rules to which this decision relates are set out in Appendix Two to this decision. 3. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules. Waiver from Rule 5.2.3 Decision 4. Subject to the conditions in paragraph 5 below, and on the basis that the information provided by MEL is complete and accurate in all material respects, NZXR grants MEL a waiver from Rule 5.2.3 in respect of the MEL040s for a period of six months from Quotation Date, to the extent that this Rule would otherwise require the MEL040s be held by at least 100 Members of the Public holding at least 25% of the MEL040s on issue. 5. The waiver in paragraph 4 above is provided on the conditions that: a. MEL clearly and prominently discloses this waiver, and the implications of this waiver in the Terms Sheet for the MEL040s, and any other Offering Document relating to an offer of MEL040s made during the period of this waiver; b. MEL clearly and prominently discloses this waiver, and the implications of this waiver in any Half-Year and Annual Reports issued during the period of this waiver; c. MEL discloses liquidity as a risk in the Terms Sheet for the MEL040s; and d. MEL notifies NZXR as soon as practicable if there is a material reduction to the total number of Members of the Public holding at least a Minimum Holding of the MEL040s, and/or the percentage of MEL040s held by Members of the Public holding at least a Minimum Holding. Reasons 6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZXR has considered that: a. MEL has advised that it expects the spread of the MEL040s will increase over time to meet the spread requirements of Rule 5.2.3. However, MEL will have no knowledge of how the MEL040s will be allocated until after its bookbuild process. Accordingly, MEL will be unable to confirm prior to the Offer opening, whether the spread requirements will be met on Quotation; b. Debt Securities are not generally subject to the same degree of trading activity as Equity Securities; c. the conditions, contained in paragraph 5(a), 5(b) and 5(c) above, require MEL to provide access to information about this waiver and its implications to prospective investors as part of the Offer, as well as those wishing to trade in the MEL040s for the period of this waiver. Investors can take this information into account when making their investment decision; d. the condition contained in paragraph 5(d) above requires MEL to provide information that will allow NZXR to monitor any material reduction in the spread of the MEL040s over the period of this waiver; e. this waiver is granted for six months. This gives NZXR the opportunity to reconsider the spread of the MEL040s in six months' time if MEL considers a waiver is still required; and f. there is precedent for this decision. Waiver from Rule 7.11.1 Decision 7. Subject to the conditions in paragraph 8 below, and on the basis that the information provided by MEL is complete and accurate in all material respects, NZXR grants MEL a waiver from Rule 7.11.1 in respect of the MEL040s, to the extent that this Rule would otherwise require MEL to allot the MEL040s within five Business Days after the latest date on which applications for the MEL040s close. 8. The waiver in paragraph 7 above is provided on the conditions that: a. MEL allots the MEL040s six Business Days after the latest date on which applications for the MEL040s close; and b. MEL clearly and prominently discloses this waiver in the Terms Sheet for the MEL040s. Reasons 9. In coming to the decision to provide the waiver set out in paragraph 7 above, NZXR has considered that: a. the policy of Rule 7.11.1 is to ensure that, where application monies have been submitted, subscribers obtain the benefit of their investment without undue delay. The granting of this waiver will not offend the policy behind Rule 7.11.1; b. MEL is completing the Offer around the time of the maturity date for one of MEL's existing tranches of bonds, the MEL020s. MEL submits, and NZX has no reason not to accept, that in order to ensure the success of the Offer, the Offer timetable needs to be structured around that maturity date. Further, MEL wants to have a five day Offer period to enable prospective investors sufficient opportunity to invest in the MEL040s, while reducing market risk by not running the Offer over a weekend; c. MEL has advised that the Offer needs to be announced in advance of the maturity of the MEL020s so that the MEL020 bond holders can consider participating in the Offer, rather than reallocate the capital being returned from the maturing MEL020s to other investments. This timing, combined with the points above, means the best week for MEL to run the Offer is the week before the MEL020s mature. In addition, to enable the MEL020 bond holders to reallocate the capital being returned from the maturing MEL020s to the MEL040s, the MEL040s need to be allotted on or after the maturity date for the MEL020s. The maturity date for the MEL020s is four Business Days after the Offer closes. Allotting on this date would then result in the maturity date for the MEL040s falling on a Saturday (16 March 2024). MEL considers that it would be preferable from an investor's perspective for the maturity date to fall on a weekday, which is achieved by allotting the following Monday (20 March 2017); and d. the conditions of the waiver provide comfort that the impact on investors will be limited to only one Business Day. Further, MEL will be required to provide information on the extended allotment period to prospective investors, for the investors to consider before they decide to invest in the MEL040s; e. there is precedent for this decision. Confidentiality 10. MEL has requested that this application, and any decision made in relation to it, be kept confidential until the Terms Sheet, and the form of notice to be provided by MEL under clause 20(1)(a) of Schedule 8 of the Financial Markets Conduct Regulations 2014, has been released. 11. In accordance with Footnote 1 to Rule 1.11.2 NZXR grants MEL's request. Appendix One 1. Meridian Energy Limited (MEL) is a Listed Issuer with bonds Quoted on the NZX Debt Market (Debt Market). These include the MEL020 bonds (MEL020s) which mature on 16 March 2017, and the MEL030 Bonds which mature on 14 March 2023. 2. MEL intends to make a new offer of fixed-rate bonds (MEL040s) to be Quoted on the Debt Market (Offer). 3. The Offer will open on 6 March 2017 and close on 10 March 2017. The joint lead managers for the Offer will conduct a bookbuild on or about 10 March 2017 in order to determine the MEL040s' margin (Bookbuild), which will be used to determine the MEL040s' interest rate. MEL intends to allot the MEL040s on or about 20 March 2017 (Allotment Date). MEL intends to Quote the MEL040s on the Debt Market on or about 21 March 2017 (Quotation Date). 4. MEL will release a terms sheet prior to the Offer opening, setting out the main terms of the MEL040s (Terms Sheet). 5. NZX Debt Market Listing Rule (Rule) 7.11.1 requires securities to be allotted within 5 Business Days after the latest date on which applications for Securities close. MEL has sought a waiver from Rule 7.11.1 to structure the Offer so that the Allotment Date is six Business Days after the Offer closes. Subscription monies for the Offer are payable by the holder on allotment of the MEL040s. 6. In accordance with NZX Regulation's (NZXR) Ruling on Rule 5.2.3 issued on 29 September 2015 (the Ruling), the MEL040s are required to be held by at least 100 Members of the Public holding at least 25% of the number of Securities of that Class issued, with each Member of the Public holding at least a Minimum Holding, and those requirements are maintained. 7. The Offer is structured so that 100% of the MEL040s are reserved for clients of the joint lead managers and co-manager of the Offer, primary market participants, and other approved financial intermediaries. There will be no public pool for the Offer. MEL has therefore indicated that it is uncertain whether the MEL040s will satisfy the spread requirements of Rule 5.2.3, when the MEL040s are initially Quoted on the Debt Market. Appendix Two NZX Debt Market Listing Rule 5.2.3 A Class of Securities will generally not be considered for Quotation on the NZSX or NZDX unless those Securities are held by at least 500 Members of the Public holding at least 25% of the number of Securities of that Class issued, with each Member of the Public holding at least a Minimum Holding, and those requirements are maintained, or NZX is otherwise satisfied that the Issuer will maintain a spread of Security holders which is sufficient to ensure that there is a sufficiently liquid market in the Class of Securities. Ruling on NZX Debt Market Listing Rule 5.2.3 - 29 September 2015 For the purposes of Rule 5.2.3, a Class of Debt Securities will generally not be considered for Quotation on the NZDX unless those Securities are held by at least 100 Members of the Public holding at least 25% of the number of Securities of that Class issued, with each Member of the Public holding at least a Minimum Holding, and those requirements are maintained. NZX Debt Market Listing Rule 7.11.1 An Issuer making an issue of Securities Quoted or to be Quoted (other than Equity Securities issued under Rule 7.3.10) shall proceed to allotment within five Business Days after the latest date on which applications for Securities close. End CA:00297853 For:MEL Type:WAV/RULE Time:2017-03-06 08:51:52