Mercury capital bond offer – interest rate set

Mercury announces interest rate for capital bond
offer
5 May 2022 – Mercury NZ Limited (Mercury) today announced that, following a bookbuild for its offer of unsecured,
subordinated capital bonds (Capital Bonds), $250 million of Capital Bonds have been allocated to participants (or their clients) in
the bookbuild process. This includes oversubscriptions of $50 million. There was no public pool for the offer.

The interest rate for the Capital Bonds to the First Reset Date (13 May 2027) will be 5.73% per annum, which reflects a margin
of 1.70% per annum over the underlying swap rate of 4.03% per annum.

The Capital Bonds will be issued on 13 May 2022 and quoted on the NZX Debt Market under the ticker code MCY050 on 16
May 2022.

The updated terms sheet is attached.


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:
William Meek
Chief Financial Officer
0275 173 470
For media queries, please contact:
Shannon Goldstone
Head of Communications
Media phone: 027 210 5337

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

STOCK EXCHANGE LISTINGS: NEW ZEALAND (MCY) / AUSTRALIA (MCY)

NEWS RELEASE

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CAPITAL BONDS 20221
FINAL
TERMS SHEET.
CAPITAL BONDS 2022.
Arranger &
Joint Lead Manager
Joint Lead
Managers

CAPITAL BONDS 20222
Dated 5 May 2022
This final terms sheet (“Terms Sheet”) sets out the key terms
of the offer (“Offer”) by Mercury NZ Limited (“Mercury”) of
NZ$250 million of unsecured, subordinated, interest bearing capital
bonds maturing on 13 May 2052 (“Capital Bonds”) under its master
trust deed dated 4 April 2003 (as amended from time to time) (“ Trust
Deed”) as modified and supplemented by the supplemental trust deed
dated 2 May 2022 (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”).
Accordingly, the Capital Bonds are the same class as the MCY020
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 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
referred to above to find out how the market assesses the returns and
risk premium for those 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
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.
FINAL TERMS SHEET.

CAPITAL BONDS 20223
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 MCY020 Bonds. See
Ranking on
liquidation
on page 6.
PurposeThe proceeds of the Offer are intended to be used to refinance drawn debt relating to the
acquisition of Trustpower Limited’s retail business (“Trustpower Retail”) 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 has assigned “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 13 May 2032.
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 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.
Issue AmountNZ$250 million.
Term30 years (maturing 13 May 2052) unless redeemed earlier.
Issuer Credit RatingIssue Credit Rating
S&P Global RatingsBBB+ (Stable)BB+

CAPITAL BONDS 20224
Issue Price and
Principal Amount
NZ$1.00 per Capital Bond.
Interest Rate from the
Issue Date to the First
Reset Date
5.73% per annum, being the sum of the Benchmark Rate plus the Margin.
Benchmark RateThe mid market NZD swap rate for a 5 year term determined according to market convention on
the Rate Set 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 2 decimal places, if necessary, with 0.005 rounded up).
Margin1.70% per annum.
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 13 February, 13 May, 13 August and 13 November 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 13 August 2022. As the First Interest Payment Date is a Saturday,
interest is payable on Monday 15 August 2022 instead.
Interest may be deferred at the option of Mercury – see
Discretionary deferral of interest on
page 4.
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 (13 May
2027). 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%.
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.

CAPITAL BONDS 20225
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 20226
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), 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 US
private placement notes
and unsubordinated
trade and general
creditors)
NZ$3,749 million
2
Lower ranking
/ later priority
Liabilities that rank
equally with the
Capital Bonds
The Capital Bonds
The MCY020 Bonds and
any other subordinated
obligations of Mercury
NZ$250 million
NZ$302 million
EquityOrdinary shares, reserves
and retained earnings
NZ$4,605 million

CAPITAL BONDS 20227
Notes:
1. Amounts shown above are indicative based on the financial position of the Mercury
consolidated group as at 31 December 2021. They are adjusted for the issue of the Capital
Bonds, based on an issue size of NZ$250 million, and other additional unsubordinated bank
debt drawn after balance date to finance the acquisition of Trustpower Retail and expected to
remain outstanding following issue of the Capital Bonds. 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) as at 31 December 2021, adjusted for the acquisition of Trustpower Retail and the issue
of Capital Bonds as described in note 1. It includes amounts corresponding to deferred tax
(approximately NZ$1,599 million), derivative financial instruments (approximately
NZ$358 million) and lease liabilities (approximately NZ$77 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
16 May 2022
NZX Debt Market
ticker code
MCY050
ISINNZMCYDG005C3
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.

CAPITAL BONDS 20228
Governing lawNew Zealand.
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 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/services/market-participants/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 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 20229
Opening DateMonday, 2 May 2022.
Closing Date12.00pm, Thursday, 5 May 2022.
Rate Set Date
Thursday, 5 May 2022. The initial Interest Rate for the Capital Bonds will be set and announced to the
market on this date.
Issue Date/ Allotment
Date
13 May 2022.
First Reset Date13 May 2027.
Maturity Date13 May 2052.
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 202210
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 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 4.
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 senior green bonds),
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 202211
Copies of the Trust Documents are available at Mercury’s website at
www.mercury.co.nz/investors/bonds/capital-bonds-mcy050.
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 6, 191 Queen Street
Auckland Central
Auckland 1010
Registrar
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Auckland 0622
Private Bag 92119
Victoria Street West
Auckland 1142
Legal advisers to Mercury
Chapman Tripp
Level 34, PwC Tower
15 Customs Street West
Auckland 1010
OTHER INFORMATION.

CAPITAL BONDS 202212
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, 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 and the United Kingdom.
No action has been or will be taken by Mercury which would permit
a public 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 regulations 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 you breaching 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 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 Capital 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 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 the issuer 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.
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

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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. 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 202214