State-owned Kiwibank has ruled out a public pool for its $150 million subordinated bond offer after strong interest from institutional investors.
The debt sale to help fund the bank’s growth plans opens today and closes on December 5.
Last night, Kiwibank said the bookbuild had been well received by investors and confirmed the whole offer amount of $150 million has been reserved for participaints in the bookbuild process who have received firm allocations.
The subordinated bonds will pay an interest rate of 5.80% per annum for the first five years until the rate reset date of December 15, 2017. The margin is 2.77% per annum.
Investors will be paid early bird interest on the subordinated bonds at 5.80% per annum from the time their application money is banked. So they were encouraged to lodge their applications as soon as possible.
Craigs Investment Partners and Kiwibank are joint lead mangers for the offer. ANZ and Forsyth Barr are co-managers.
The debt sale offer opens just over a week after ratings agency Standard & Poor’s cut the credit ratings of Kiwibank and its parent, New Zealand Post, to A+ from AA-, citing the group's growing reliance on its banking operations and expectations of dwindling postal revenues.
Kiwibank says it intends to treat the subordinated bonds as "tier 2" capital instruments under the Reserve Bank’s Basel III framework. The bonds are expected to have a credit rating of BB+ from Standard & Poor’s.
Kiwibank had some $1.81 billion in issued debt securities as at June 30, according to its annual report.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Tim Hunter on why Veritas is doing it the hard way
- Matthew Hooton on whether Steven Joyce will be the next national leader
- Rodney Hide on why all city planners should be fired
- Nevil Gibson discusses his latest Editor's Insight on films
- The NBR crew throw around some of the week's top stories
- Rob Hosking breaks down the political and economic week that was
- "A tragedy" - David Farrar on his disappointment with Simon Bridges
- New F&P product pipeline exciting, says Macquarie senior investment adviser Brad Gordon
- Taupo Motorsport Park executive director Tony Walker on the park's rebranding
- NZIER senior economist Christina Leung on why she does not think the OCR will hit 2%
- NBR's Cameron Officer talks about the NBR Car of the Year 2015
- John Barnett on Brewer: ‘Boy, has he got a bit to learn’