Kiwibank has had no trouble selling preference shares in a related company which pay a minimum dividend rate of 8.13 percent per annum for the first five years.The state-owned bank has previously signalled the sale of up to $150 million of perpetual calla
Kiwibank has had no trouble selling preference shares in a related company which pay a minimum dividend rate of 8.13 percent per annum for the first five years.
The state-owned bank has previously signalled the sale of up to $150 million of perpetual callable non-cumulative preference shares, to be known as Kiwi Income Securities. The shares in Kiwi Capital Securities have similar characteristics to debt instruments.
Kiwibank said today that the offer was oversubscribed in a so-called bookbuild process and has been largely allocated to financial intermediaries and institutions.
Oversubscriptions of $40m have been accepted in the bookbuild process and a pool of up $10m has been established for clients of Kiwibank. Assuming this pool is fully subscribed, the issue size will be $150m. There is no pool of shares available for direct sale to the public.
The dividend rate for the first five years will be set on May 3, 2010. It will be 2.90 percent above the five-year swap rate on that date or at the minimum dividend rate, whichever is the higher.
"We are delighted with the support shown for the offer," said Richard Schofield, Kiwibank's treasurer.
The money raised will provide tier 1 capital for Kiwibank.
The shares have no maturity date but may be called on the fifth and 10th anniversary of their issue date and quarterly thereafter. They have been assigned a credit rating of BBB by Standard&Poor's.
The shares are in Kiwi Capital Securities and do not entitle holders any voting rights in relation to Kiwibank.
ANZ National Bank Ltd is the arranger for the offer. The joint lead managers are ANZ National Bank Ltd and Kiwibank Ltd and the co-managers are Craigs Investment Partners and Forsyth Barr Ltd.
