Kiwibank's tier 1 preference share offer to raise up to NZ$150 mln to open April 8

Kiwibank has announced its offer of tier 1 perpetual callable non-cumulative preference shares to raise up to NZ$150 million will open on April 8 and close on April 30. Kiwibank previewed the move on March 10, but did not set a date. Kiwibank will use the funds as capital to back future lending growth, removing the need for its ultimate owner, the Government, to stump up more capital. The likely margin and minimum dividend rate are expected to be announced on April 7, while the final rate will be set on May 3. Here are all the details below.

Kiwi Capital Securities Limited, a related company of Kiwibank Limited, today announced that it has registered a prospectus for an offer of up to NZ$100 million perpetual callable non-cumulative preference shares (Shares), to be known as Kiwi Income Securities, to the public (with the option to accept oversubscriptions of up to $50 million). The offer is to open on 8 April 2010 and is expected to remain open until 30 April and will be available to both retail and institutional investors. The proceeds from the issue of the Shares are to be ultimately used to provide tier 1 capital to Kiwibank Limited. The Shares are not shares in Kiwibank, but are Shares in Kiwi Capital Securities. The Shares will not entitle holders any voting rights in relation to Kiwibank, and only limited voting rights in relation to Kiwi Capital Securities. Kiwi Capital Securities’ ultimate parent company is New Zealand Post Limited. The Shares will have no maturity date. However, they may be called on the fifth and tenth anniversary of their issue date and quarterly thereafter (and in certain other circumstances). They have been assigned a credit rating of BBB by Standard & Poor’s. The dividend rate applying to the Shares will be fixed for the initial five years and then reset for subsequent 5 yearly periods at the margin plus the swap rate applying at the time. Dividends are scheduled to be paid on a quarterly basis. Dividends are non-cumulative. An announcement of the margin and the minimum dividend rate for the Shares is expected to be made on or around 7 April 2010. The actual dividend is expected to be set and announced on 3 May 2010. ANZ National Bank Limited has been appointed as Arranger for the offer. The Joint Lead Managers for the offer are ANZ National Bank Limited and Kiwibank Limited and the Co-Managers are Craigs Investment Partners and Forsyth Barr Limited. Applications for the Shares can only be made using the application form included in the Investment Statement for the Shares. Investors should contact any of the Joint Lead Managers or the Co-Managers or their financial advisor to request a copy of the Investment Statement or secure an allocation of the Shares.