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Kiwibank rules out public pool for $150 bond offer

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.

More by Georgina Bond

Comments and questions
3

Is this Jonkey pulling the strings again for his mates; selling more NZ investment to foreigners?

Can someone fully informed, thats not a spin doctor themselves, tell me otherwise?

Richard S - your comment seems imply that you don't know what you are talking about with regards to the above, nor are you prepared to investigate for yourself, however until such time as someone who you determine not to be a "spin doctor" states otherwise you will believe that this is a Government conspiracy (the irony being of course that you will determine anyone who does state otherwise to be complicit in such a conspiracy).

That sounds a little ridiculous doesn't it?

Ah...Ive a hooked a spin doctor