By PAUL PANCKHURST
Two attempts by New Zealand brokers to offer debt market investors the high returns available overseas for investment-grade products - two very different outcomes.
Forsyth Barr will seek $100 million from retail and institutional investors through an issue of investment grade fixed-interest notes, due to open on November 17.
The
firm will accept up to $100 million in over-subscriptions for the notes.
One series of the Global Credit Notes is expected to be rated AAA by Standard & Poor's and offer a return of 7.2 per cent.
The other is expected to be rated A and offer 8.25 per cent.
The returns of the two products are linked to the credit performance of an international portfolio of 130 companies and other entities.
It is part of a wave of new products bringing New Zealand retail investors the higher returns available overseas by tapping into the global credit derivatives market.
Macquarie New Zealand, meanwhile, has pulled its planned issue of Generator 2 Bonds - a similar product that would have been rated A+ and offered a 7.5 per cent return.
Macquarie had this week registered an offer document and was soliciting requests for allocations.
However, the firm was caught out by a global fall in the rates charged for credit.
That, it seems, made the products uneconomic.
Coming a little later, Forsyth Barr's products have priced in the change in the credit market.
