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ANZ NZ five-year bonds to pay investors 3.70% per annum

ANZ NZ five-year bonds to pay investors 3.70% per annum

ANZ New Zealand is borrowing $500 million through a five-year bond issue that'll pay investors 3.70% interest per annum.

The unsecured, unsubordinated fixed rate bonds have been priced at a margin of 1.05% above the swap rate, the top of the indicative margin range previously provided. ANZ's five-year term deposit rate is currently 4.10%.

ANZ had said it was looking to borrow up to $100 million from retail and institutional investors, but gave itself the option of accepting unlimited oversubscriptions at its own discretion.

The entire issue has been allocated to financial intermediaries for distribution to their clients and to New Zealand institutional investors. The bonds will be issued on 30 May and are expected to start trading on the NZX debt market the following day.

The bonds are not guaranteed by any member of the Australia and New Zealand Banking Group Ltd or any other person, with the issuer - ANZ NZ - solely responsible for repayment.

The terms sheet is here.

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Okay so they've had a good year made some significant profits and yet are issuing unsecured bonds to the tune of half a billion dollars at a rate of 3.7%.. Which seems high given how tight the margin is on their biggest enterprise (mortgage lending).

Was the money not available on the international markets for them to acquire for a lower offered rate of return? If so, Why? Or do they just prefer to have their debt offered to them without any security? (Thanks Mr Key)


They redeemed 18/04/2018 ANBA $750mill subordinated notes coupon @ 5.28%. All part of the shuffle one imagines.