Bank of New Zealand (BNZ) is planning to offer subordinated bonds worth up to NZ$300 million to the public. It designs to sell these bonds in June. It is proposed that the issue will open, close and price by mid-June. BNZ wants to retain the right to accept over-subscriptions.
The bonds will be unsecured, subordinated debt obligations, issued under a Deed Poll and Investment Statement.
The bonds will mature after a period of ten years but will be callable after five years. In the event BNZ doesn’t call them after five years, the issue margin will be increased by 0.50 per cent. The issue is a rarity in that it is a subordinate issue. Its proceeds shall be used for general corporate purposes.
The bonds that BNZ proposes to issue will carry a fixed rate of interest payable half-yearly. The interest rate payable has not yet been decided but it will be a margin above the five-year swap rate. The interest, however, shall not create any obligation or commitment for BNZ. No money is currently being sought. Money will also not be accepted unless the subscriber has received an investment statement.
