South Canterbury Finance investors, including all bondholders but not preference shareholders, have been told to spend their cash wisely when they are reimbursed by the government a total of $1.6 billion following the company’s receivership today.

In addition, the government is negotiating a loan of up to $175 million to the receivers for repayment of prior charges over South Canterbury’s assets, including a $100 million facility arranged through investor George Kerr’s Torchlight fund.

Many of the concerns that led the Treasury to withdraw a Crown guarantee for Viaduct Capital relate to its links to Paul Bublitz’s Hunter Capital Group.

Treasury notes included in Viaduct’s prospectus allege that Hunter Capital Group may have benefited from the guarantee in a way that was not intended by the Crown.

Hunter Capital lent Viaduct shareholder Phoenix money to enable it to buy the company.

As predicted earlier this week, ANZ National bank has successfully issued $US1 billion of New Zealand government guaranteed debt in three year senior medium term notes.

Following a “road show” visiting key US investors, the successful bond issue is the first to utilise the government’s wholesale guarantee in offshore markets since the scheme was introduced in November 2008.

ANZ National is planning to be the first bank to sell government guaranteed bonds in offshore markets according to industry sources, with an issue announced possibly as soon as the end of the week.

The offer will not be open to retail investors, and is expected to be of a “benchmark” size of at least $US500 million for three years.

An industry source says the notes are Aaa rated by Moody’s (its top rating) with Standard & Poor’s one step lower at AA+.