KEY POINTS:
What is it called and what sort of savings product is it?
Marac Finance is looking to raise up to $125 million through a secured bond issue.
What company is behind it?
Marac is an iconic brand name in the New Zealand savings industry. It has had a number of different owners over the decades. Marac is owned by NZX-listed company Pyne Gould Corporation.
Who is the target market?
Investors who are willing to take on some higher-risk, fixed-interest investments.
What return does it offer?
The rate will be set when the offer closes. It is expected to be set within the range of 10.25-10.50 per cent, or the aggregate of the prevailing five-year swap rate and a margin, which has yet to be determined.
When was it launched?
The offer is yet to officially open.
What other products is it like or is it competing with?
There are a number of other bonds already listed on the NZDX, the market for trading debt securities, which are similar. However, none are currently raising money. Also, it is very similar to the South Canterbury bond offer on the market.
Long, short or medium term?
The bonds have a term of five years and will be tradeable on the NZDX market.
What's the unique selling point?
One of the more appealing features is that this has the ability to lock in a good, high-interest rate for a medium term. Also, Marac showed in a profit guidance note last week that it was doing well, despite difficult conditions. The other key point is that the bonds have a BBB- Standard & Poors rating.
How strong a stomach do you need for it?
Medium.
What's the hitch?
Perhaps the biggest risks are that Marac gets hit by the troubles in the finance company sector, and an economic downturn impacts on borrowers' ability to repay loans.
