Westpac New Zealand's borrowing $1 billion via a five-year bond issue that will pay interest of 3.868% per annum.
The fixed-rate, medium term notes offer had sought to raise up to $100 million, with unlimited over-subscriptions at the bank's discretion possible. The margin was set at 0.83%, the low end of the 0.83% to 0.85% per annum indicative margin.
The interest rate the bonds will pay is slightly lower than Westpac NZ's current advertised five-year term deposit rate of 3.90%.
The minimum application for the unlisted bonds, which will pay interest twice yearly, was $5000. They're to be issued on November 19, and mature on November 19, 2030.
The bonds are senior, unsecured and unsubordinated obligations of Westpac NZ.
The bank says the $1 billion borrowed will be used for its general corporate purposes, including making loans to customers.
2 Comments
Never forget the institutional brokerage which investors were required to pay to acquire these bonds when comparing the rate to term deposits.
Yes but if interest rates fall your bond will rise in value, unlike your shitty 5 year term dep.
The inverse is true if you do not hold to maturity, however the bank will charge you a break fee on the 5 year term dep.
heads you lose and tails the bank wins. Give me the bond over the term dep every day.
You made similar comments earlier this year. So I went and did some homework. Then purchased some bonds. Happy camper. So thank you very much for your engagement!
You made similar comments earlier this year. So I went and did some homework. Then purchased some bonds. Happy camper. So thank you very much for your engagement!
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