BNZ signals $300m bond issue

Bank of New Zealand is planning to raise $300 million through the sale of subordinated bonds to the public in June.

The bonds will have a 10-year maturity but will be callable after five years. They are domestic New Zealand dollar denominated bonds.

They will be unsecured and subordinated, meaning they rank behind senior debt.

The interest rate payable will be set later but will be a margin above the five-year swap rate.

If the issue is not called after five years, the margin on the bonds will be increased by 0.5 percentage points.

The issue is rare in that it is subordinated.

It is intended that the issue will open, close and be priced by mid-June. Proceeds will be used for general banking purposes.

- NZPA