By Gareth Vaughan
BNZ has raised its targeted NZ$350 million in an over subscribed five-year bond issue with nearly half the money raised coming from retail investors.
The bank raised NZ$100 million through the fixed interest rate tranche of its offer, with these bonds to pay 4.68%, being a 121 basis points margin over the five-year swap rates. The margin's below the indicative range, which was 123-128 basis points.
BNZ raised NZ$250 million through its floating rate tranche, which will be priced on Thursday's issue date at 121 basis points over the 90 day Bank Bill rate. The floating interest rate will be reset quarterly, with interest payable quarterly. The indicative margin for the floating rate offer was 123-128 basis points over the 90 day Bank Bill rate.
The new issue, which was capped at NZ$350 million, comes after BNZ last month said it would call and repay a NZ$450 million perpetual non-cumulative share issue, which has been paying investors 9.89%. Those securities, regarded as tier one capital, will be called on their call date, which is this Thursday, March 28.
Last month BNZ Treasurer Tim Main told interest.co.nz the bank's current fund raising needs were "just maintenance." Main said money needed to be raised in BNZ's current financial year, which runs until September 30, totaled about NZ$1.5 billion, compared with the about NZ$4 billion it raised in each of its previous two financial years.
Both new bonds will mature on March 28, 2018 and have an AA- credit rating from Standard & Poor’s. The bonds won't be listed on the NZX debt market but are tradable over the counter via the likes of sharebrokers and bank investment divisions. The bonds are technically registered transferable deposits, or unsecured senior bonds.
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3 Comments
The bank raised NZ$100 million through the fixed interest rate tranche of its offer, with these bonds to pay 4.68%, being a 121 basis points margin over the five-year swap rates. The margin's below the indicative range, which was 123-128 basis points.
The bonds are technically registered transferable deposits, or unsecured senior bonds.
Double it, treble it, or whatever and it will never be enough given OBR.
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