Kiwibank, which had its Standard & Poor's credit rating downgraded a notch to A+ earlier this week, says it's considering making a retail bond offer of up to NZ$150 million worth of unsecured, subordinated bonds.
The bank, a subsidiary of State Owned Enterprise New Zealand Post, said the terms of the subordinated bonds will be structured to be recognised as tier two regulatory capital.
Kiwibank's new bond offer comes after it called a NZ$75 million unsecured subordinated bond, that was paying 7.72% per annum, on its March 20 call date. A that point the banks weren't clear about where such bonds would fit under the Reserve Bank's Basel III capital rules, something they now have clarity on.
Kiwibank says the offer will be made next week.
Craigs Investment Partners is the arranger and joint lead manager, with Kiwibank itself another joint lead manager, and ANZ and Forsyth Barr co-managers.
Kiwibank's statement made no mention of what interest rate the bonds might pay, how the rate might be set, nor the duration of the offer. However, a Kiwibank spokesman said the rate will be set following a book build and interest.co.nz was told further detail on both the interest rate and duration of the offer was likely next Monday.
(Update adds additional detail).
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