Kiwibank is borrowing $750 million through a five-year bond issue.
The issue of unsecured, unsubordinated fixed rate medium term notes attracted a final orderbook of more than $965 million, with the issue size set at $750 million. This comes after Kiwibank said it was seeking up to $100 million, with unlimited oversubscriptions at its own discretion.
An interest rate of 5.216% per annum has been set, which is a 0.75% margin over the reference rate, being the semi-annual mid-market swap rate for an interest rate swap from the issue date to the maturity date as calculated on Thursday. The issue date is next Wednesday, September 30, and the maturity date is September 30, 2031.
Kiwibank's current advertised five-year term deposit rate is 4.85%.
Investors are required to stump up at least $5,000 for the bonds priced at $1 per note, with applications above that in multiples of $1,000. The bonds are direct, unconditional and unsecured obligations of Kiwibank and won't be listed on the NZX debt market.
The bonds are expected to have an A1 credit rating from Moody's and an AA rating from Fitch, which are inline with Kiwibank's own credit ratings.
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