Westpac NZ looks to raise as much as NZ$900 mln, combined, from five-year and seven-year debt issues to institutional investors

Westpac New Zealand has launched two debt offers that could see it raise as much as NZ$900 million.

The bank, which pulled in NZ$750 million from institutional, or professional, investors in a three-year note issue in March, has launched a five-year floating rate note offer seeking a minimum of NZ$100 million and a maximum of NZ$400 million, and a seven-year medium term note offer seeking a minimum of NZ$100 million and a maximum of NZ$500 million. Both are again primarily targeted at institutional investors.

The five-year offer has an indicative issue margin of between 1.80% and 1.85% over the swap rate 90 day bank bill rate, and the seven-year 2.05% over the swap rate. Based on Thursday's rates, the five-year offer would pay investors' interest of between 4.48% and 4.53%, and the seven-year 5.7%.

The five-year offer opened at 2pm today, closes at 5pm this Thursday, July 5, and will be priced a week later on July 12 when the notes will be issued. They will mature on July 12, 2017. The seven-year offer also opened at 2pm today and will close at 5pm on Thursday. However, it'll be priced at 11am this Friday, July 6, and notes will be issued on Thursday, July 12. They will mature on July 12, 2019.

Westpac has an AA- credit rating from Standard & Poor’s, Aa3 from Moody’s Investors Service, and AA- from Fitch Ratings.

Westpac's March senior, unsecured and unsubordinated issue had sought a minimum of NZ$100 million and maximum of NZ$450 million. But due to strong demand, it raised NZ$750 million. Of that, NZ$600 million worth is paying investors' a floating interest rate and NZ$150 million a fixed rate. The fixed rate is 4.8% and the initial floating rate 4.28%.

(Story corrected to reflect Westpac's five-year floating rate note issue will be priced off the 90 day bank bill rate, not the five-year swap rate).