ASB is borrowing $800 million through a five-year bond issue that'll pay investors annual interest of 4.782%.
The bank opened the bond offer on Tuesday, to both retail and institutional investors, saying it was seeking up to $100 million, with the potential to accept unlimited oversubscriptions at ASB's discretion.
The interest rate was set on Thursday at a 0.73% margin above the reference rate, which was the semi-annual mid-market swap rate for an interest rate swap from the issue date to the maturity date. The indicative margin provided on Tuesday was 0.70% to 0.73% per annum.
ASB says it'll use the money raised for general corporate purposes.
Technically, the bonds are unsecured unsubordinated medium term notes with the interest rate fixed for five years. ASB current advertised five-year term deposit rate is 5%, so higher than the bond's interest rate.
The bonds are due to be issued on Thursday, November 19, can be traded on the NZX debt market from Friday, November 20, and are set to mature on November 19, 2031.
They're expected to have credit ratings aligned with ASB's own AA- from S&P Global Ratings and Aa3 from Moody's.
The terms sheet is here.
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