ANZ Bank New Zealand wants to raise at least $100 million by selling five-year bonds, which will have a lower interest rate than what it's offering term depositors.

The Auckland-based unit of Australia & New Zealand Banking Group has today opened an offer to sell unsecured, unsubordinated fixed rate bonds maturing on September 1, 2022, with the capacity for unlimited oversubscriptions, it said in a statement.

The bonds have an indicative margin above the five-year swap rate of 1.05-to-1.1 per cent, which at today's rate of 2.63 per cent would see the bank pay annual interest of between 3.68 and 3.73 per cent. That's still cheaper than raising funds from retail deposits, with ANZ currently offering an annual rate of 4.3 per cent on a five-year term, according to the interest.co.nz website.

Banks have been complaining about their shrinking margins as growing turbulence in financial markets and the prospect of major central banks withdrawing the extraordinary stimulus of the past decade have pushed up international interest rates, making wholesale funding from overseas more expensive for lenders.

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ANZ Bank New Zealand's interest costs ran up to $2.35 billion in the nine months ended June 30 on deposits and other borrowings of $102.09b at the balance date. That compares to a $2.59b interest expense on borrowings of some $99.94b a year earlier. Through the same period, interest income shrank to $4.62b on net loans totalling $116.45b from interest income of $4.84b on net advances of $114.62b.

The final interest rate will be set in a bookbuild on Friday, which is also when the bond offer closes. ANZ intends to offer the bonds to the New Zealand public and certain institutional investors, although there won't be a public pool.

The bonds are expected to be listed on the NZX's debt market, where the bank has eight other instruments listed.