BNZ's borrowing $1.25 billion in a five-year bond issue that will pay 4.844% annual interest and was open to retail investors.
The issue of unsecured, unsubordinated fixed rate notes was announced on Monday, with the bank seeking up to $100 million, but open to accept oversubscriptions at its discretion.
The interest rate is higher than BNZ's current 4.70% advertised five-year term deposit rate. It's the mid-market swap rate for an interest rate swap from the issue date to the maturity date as calculated by BNZ, plus a margin of 0.68%, the top of the indicitive margin range of 0.65% to 0.68% per annum provided by the bank.
The bonds will be issued on September 18, will be traded on the NZX Debt Market, and are set to mature on September 18, 2031. They've been sold in $5,000 minimum denominations and in multiples of $1,000 thereafter.
BNZ will use the money borrowed for "general business purposes." It expects the bonds to have an AA- credit rating from S&P Global Ratings, and A1 from Moody’s Investors Service, with these ratings in line with BNZ's own credit ratings.
On Thursday BNZ said it had received interest in the bond issue in excess of $1.2 billion, excluding lead manager trading interest. BNZ itself is the lead manager.
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