BNZ says it'll repay debt securities with a face value of NZ$450 million on their first call date of March 28.
The decision contrasts with one by rival ANZ last week, which decided it wouldn't repay a NZ$835 million debt issue paying 9.66% per annum, but rather would roll it over with the interest rate to be reset much lower. This was apparently the first time one of the major Australasian banks has decided not to call a perpetual hybrid security when expected.
Issued in 2008, the BNZ perpetual non-cumulative shares have been paying investors interest of 9.89% per annum. BNZ could have rolled the issue over for another five years but the interest rate would've been reset much lower. It would've been reset at 220 basis points over the five-year swap rate, which based on today's five-year swap rate of 3.63%, would give a rate of 5.83%.
"BNZ Income Securities Limited wishes to advise that National Australia Bank Limited (BNZ's parent) is exercising its right to call the shares on the Call Date, being 28 March 2013," the bank says.
"We wish to advise you that the persons recorded on the Share register as the holder of the Shares as at 5pm on 18 March 2013 (being the Record Date for the purposes of the NZX Listing Rules) will be the persons who will receive the payment for the Shares, and the dividends accrued on the Shares, on 28 March 2013."
"We have requested NZX Limited to place a trading halt on the Shares from the opening of business on 14 March 2013 until 28 March 2013, being the date upon which the transfer of the Shares will occur. On this basis, the last day of trading of the Shares will be 13 March 2013."
The BNZ securities last traded at NZ$98.2 per NZ$100.
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