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
- Spark partners with Netflix to boost flagging broadband share
- Mid-term report card: How's the reporting season going?
- Carry on: Xiamen for Auckland, Cathay for Christchurch, Virgin for HK and more
- Mt Albert by-election: all over bar the doubting
- What readers think of ComCom's Sky Vodafone merger decision
Most listened to
- Hobson Wealth's James Grigor gives an earnings season update
- Craigs' Mark Lister on why the US share market is rallying so hard
- Rob Hosking'a by-election takewayas, 'Ardern's win is no reason to elevate her to deputy leadership'
- Competition lawyer Andy Matthews on whether ComCom is getting tougher
- Intuit's Brad Smith on QuickBooks Online's accelerating growth