ASB is seeking to raise at least NZ$100 million via a dual-tranche issue of senior unsecured fixed rate and floating rate notes. ASB has the right to accept unlimited oversubscriptions.
The offer provides replacement funding for the bank’s existing $475 million senior fixed rate bonds which mature next Tuesday (July 16) and are paying a coupon of 8.52%.
The fixed rate tranche will have a maturity of 18 July 2018 and the floating rate notes 2 August 2018.
The Notes are being offered for subscription in New Zealand only and will not be listed on the NZ debt market.
Indicative pricing is set at a margin of 110-115 basis points over the applicable bank bill rate (floating) and swap rate (fixed).
The interest rate for the floating rate note is a function of the applicable bank bill rate for the period plus the margin.
Therefore based on the current three-month Forward Rate Agreement (FRA) rate of approximately 2.65%, an indicative interest rate for the first period would be between 3.75% and 3.80% if the bonds were priced today.
For the fixed rate bond, the five-year swap rate this morning of 3.97% would mean an initial indicative interest rate of between approximately 5.07% to 5.12% if the bonds were priced today.
Subscription amounts are a minimum of NZ$10,000 and in multiples of NZ$1,000 thereafter.
Pricing for both tranches will occur next Tuesday, July 16.
Settlement of the Fixed Rate Notes will occur on Thursday July 18.
Rate set and settlement of the Floating Rate Notes happens on Friday August 2.
(updated with additional information and includes an indicative floating rate yield )
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