Tower announced it had raised NZ$81.7 million through a five year, senior unsecured bond offer. It had initially sought NZ$80 million with the option to accept NZ$20 million in oversubscriptions at a rate of 8.5%. The bond issue contrasts with successful issues by corporates such as Fonterra, which had oversubscriptions of NZ$500 million for its initial NZ$300 million offer; and Fletcher Building, which had NZ$31 million of oversubscriptions. Earlier today, NZ Post said it would extend its offer by NZ$50 million to NZ$200 million. Tower's 8.50% rate sat near the top of rates offered by recent corporate bond issuers, the highest being 9% offered by Fletcher Building. "In the current market conditions, Tower is very pleased with the level of support from both institutional and public investors. The Senior Bonds will give Tower a stable funding base for the next five years," Tower Group Managing Director Rob Flannagan said. See our corporate bond-rush page for a list of recent retail bond offers in New Zealand. Tower does not have a credit rating from Standard and Poor's or Moodys, although it does have a BBB minus rating from AM Best, an insurance company ratings agency.
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