sign up log in
Want to go ad-free? Find out how, here.

Heartland NZ repays NZ$92.3 million of PGG Wrightson Finance bonds after acquisition of rural lender

Heartland NZ repays NZ$92.3 million of PGG Wrightson Finance bonds after acquisition of rural lender

Bank wannabe Heartland New Zealand says it's repaying NZ$92.3 million worth of maturing bonds it took on liability for following its recent acquisition of rural lender PGG Wrightson Finance.

Heartland NZ says its subsidiary, Heartland Building Society, will repay the maturing, unsecured bonds from cash reserves today. Heartland NZ, which was created through January's merger of Marac Finance, CBS Canterbury and Southern Cross Building Society, completed the acquisition of about NZ$465 million worth of PGG Wrightson Finance assets and NZ$455 million worth of liabilities on August 31.

The deal included Heartland NZ taking on PGG Wrightson Finance's debt covered by the extended Crown retail deposit guarantee scheme until December 31, including the bonds it's repaying.

Heartland NZ Treasurer Craig Stephen told in August he was confident the building society's liquidity of NZ$634 million would comfortably see it negotiate the end of the Crown guarantee, which Heartland NZ is also in, for both the group's Heartland NZ and PGG Wrightson Finance liabilities.

Meanwhile, Heartland NZ reiterated that it's considering a replacement unsecured bond issue and with Westpac as arranger for any issue and BNZ and Westpac joint lead managers.

"Given Heartland’s strong liquidity at present, the additional term funding is not necessary," Heartland NZ said. "However, the unsecured bond issue is being considered, given demand, and a desire by Heartland to retain a diversified funding mix and provide quality product to its investors."

Heartland NZ was formed with the aim of becoming a sharemarket listed, New Zealand controlled bank that doubles its NZ$2.2 billion asset base within five years by growing lending to families, small and medium sized businesses and farmers. Its management plans to apply to the Reserve Bank for bank registration before the end of 2011.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.