CHORUS LIMITED — Capital/Financing Update 2018

Jul 2, 2018

==> picture [201 x 22] intentionally omitted <==

Chorus Limited Level 10, 1 Willis Street P O Box 632 Wellington New Zealand

Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

3 July 2018

Notification of issue of CFH securities

Chorus Limited has issued further Crown Fibre Holdings (CFH) securities as per the attached notices.

ENDS

For further information:

Brett Jackson Investor Relations Manager Phone: +64 4 896 4039 Mobile: +64 (27) 488 7808 Email: brett.jackson@chorus.co.nz

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Chorus Limited (“ Chorus ”)

ABN

152 485 848

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to CFH1 Equity Securities, CFH1 Debt Securities & CFH1 be issued Warrants 2 Number of[+] securities issued or 4,494,360 CFH1 Equity Securities to be issued (if known) or 4,494,360 CFH1 Debt Securities maximum number which may be 128,959 CFH1 Warrants issued

3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

The CFH1 Equity Securities are redeemable preference shares carrying no right to vote at meetings of holders of ordinary Chorus shares, but entitle the holder to a right to a repayment preference on liquidation. The CFH1 Debt Securities are unsecured, non interest bearing and carry no voting rights at meetings of holders of ordinary Chorus shares. The CFH1 Warrants are an option to acquire ordinary shares in Chorus on a specified exercise date at a set strike price. The terms of the issue for the CFH1 Equity Securities, CFH1 Debt Securities and the CFH1 Warrants are as set out in the subscription agreement between Chorus and Crown Fibre Holdings Limited (CFH) dated 9 November 2011 as amended by agreements between Chorus and CFH dated 18 September 2016 and 26 January 2017 (Subscription Agreement). Further details are set out in the summary of CFH1 Securities which is available at https://company.chorus.co.nz/reports

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i	CFH1 Equity Securities No. On a liquidation or winding up of Chorus, holders of CFH1 Equity Securities will have the right to repayment of the issue price ranking behind creditors of Chorus but ahead of the ordinary Chorus shares. The CFH1 Equity Securities will otherwise carry no right to share in the surplus assets of Chorus on winding up or liquidation. CFH1 Debt Securities No. The principal amount of each CFH1 Debt Security will consist of a senior portion, equal to the present value of the sum repayable on the CFH1 Debt Security, and a subordinated portion equal to the remainder of the face value. The senior portion will rank equally with all other unsecured, unsubordinated creditors of Chorus. The subordinated portion will rank below all other indebtedness of Chorus. On winding up, dissolution or liquidation of Chorus, no payment shall be made to holders of CFH1 Debt Securities in respect of the subordinated portion until all other indebtedness of Chorus is repaid in full. CFH1 Warrants N/a
	$NZ1.00 per CFH1 Equity Security $NZ1.00 per CFH1 Debt Security Nilper CFH1 Warrant
	Call notice issued by Chorus to CFH on 29 June 2018 pursuant to the terms of the Subscription Agreement. The funds are to be used by Chorus in the construction of the Ultra-Fast Broadband network in New Zealand.
	N/a

6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	2 July 2018 for each of the CFH1 Equity Securities, CFH1 Debt Securities and the CFH1 Warrants

8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	429,641,197 500,000,000	Fully paid ordinary shares Euro Medium Term Notes
	Number:	+Class
	379,985,281 379,985,281 10,705,346	CFH1 Equity Securities (unquoted) CFH1 Debt Securities (unquoted) CFH1 Warrants (unquoted)

• 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

CFH1 Equity Securities

To the extent they have not been redeemed,
dividends will become payable on an increasing
proportion of the CFH1 Equity Securities from
2025 onwards. The dividend rate on the CFH1
Equity Securities will be equal to a reference rate
plus a margin of 6% per annum.
Chorus is not obliged to declare any dividend on
CFH1 Equity Securities in respect of any period,
but if it does not make a scheduled dividend on
the CFH1 Equity Securities it may not make any
distribution on ordinary shares until a subsequent
dividend on the CFH1 Equity Securities is paid in
full. The dividends payable on the CFH1 Equity
Securities are non-cumulative.
If at any time Chorus' credit rating is three notches
or more below its initial rating, no dividends will
be scheduled or payable on the CFH1 Equity
Securities.
Further details of the dividends for the CFH1
Equity Securities are set out in the summary of
CFH1 Securities which is available at
https://company.chorus.co.nz/reports
CFH1 Debt Securities
N/a
CFH1 Warrants
N/a

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

(b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

• 38 Number of[+] securities for which +quotation is sought

• 39 +Class of +securities for which quotation is sought

40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

 the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before[+] quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

==> picture [120 x 27] intentionally omitted <==

Sign here: ......................................................... Date: 2 July 2018 ~~(Director/~~ Company Secretary)

Print name: Lucy Riddiford

== == == == ==

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 10

==> picture [201 x 22] intentionally omitted <==

Chorus Limited Level 10, 1 Willis Street P O Box 632 Wellington New Zealand Email: company.secretary@chorus.co.nz

NZX Client Market Services NZX Limited Wellington

3 July 2018

NOTIFICATION OF ISSUE OF SECURITIES

For the purposes of Listing Rule 7.12.1 Chorus Limited (NZX: CNU) ( Chorus ) advises that the following Securities have been issued pursuant to the terms of the subscription agreement between Chorus and Crown Fibre Holdings Limited ( CFH ) dated 9 November 2011, as amended by agreements between Chorus and CFH dated 18 September 2016 and 26 January 2017 ( Subscription Agreement ):

• a) Class of CFH1 Equity Securities (unquoted) Securities

CFH1 Warrants (unquoted)

ISIN Not applicable Not applicable b) Number 4,494,360 128,959 issued c) Issue price $1.00 per CFH1 Equity Security Nil d) Payment Cash Nil e) Amount Paid in full Not applicable paid up f) Principal CFH1 Equity Securities are redeemable CFH1 Warrants are an option to terms of preference shares carrying no right to acquire ordinary shares in Chorus on Securities vote at meetings of holders of ordinary a specified exercise date at a set (other than Chorus shares, but entitle the holder to strike price. for Quoted a right to a repayment preference on Further information regarding the Securities) liquidation. Dividends will become terms of the CFH1 Warrants is set out payable on a portion of the CFH1 Equity in the summary of CFH1 Securities Securities from 2025 onwards, with the which is available at portion of CFH1 Equity Securities that https://company.chorus.co.nz/reports attract dividends increasing over time. Further information regarding the terms of the CFH1 Equity Securities is set out in the summary of CFH1 Securities which is available at https://company.chorus.co.nz/reports

Chorus Limited

g)	Percentage	0.97% of those CFH1 Equity Securities	0.97% of those CFH1 Warrants
	of the total	eligible to be issued under this	eligible to be issued under this
	Class	programme	programme
	of
	Securities
	issued
h)	Reason for	Call notice issued by Chorus to CFH on	Call notice issued by Chorus to CFH
	issue	29 June 2018 pursuant to the terms of	on 29 June 2018 pursuant to the
		the Subscription Agreement	terms of the Subscription Agreement
i)	Specific	Board resolution passed on 3 April	Board resolution passed on 3 April
	authority	2012	2012
	for issue
j)	Terms or	The terms of issue are as set out in the	The terms of issue are as set out in
	details of	Subscription Agreement. Further	the Subscription Agreement. Further
	issue	information regarding the terms of the	information regarding the terms of
		CFH1 Equity Securities is set out inthe	the CFH1 Warrants is set out in the
		summary of CFH1 Securities which is	summary of CFH1 Securities which is
		available at	available at
		https://company.chorus.co.nz/reports	https://company.chorus.co.nz/reports
k)	Total	379,985,281 (unquoted)	10,705,346 (unquoted)
	number of
	Securities
	of Class
	after issue
l)	Treasury	Not applicable	Not applicable
	Stock
	(acquisition
	only)
m)	Date of	2 July 2018	2 July 2018
	issue

Yours faithfully

==> picture [115 x 26] intentionally omitted <==

Lucy Riddiford Acting General Counsel & Company Secretary

==> picture [114 x 13] intentionally omitted <==

Chorus Limited