PGG Wrightson Finance is signalling a domestic bond sale of up to $75 million to fund growth in its business.
The finance subsidiary of PGG Wrightson was yesterday approved under the Government's Deposit Guarantee Scheme and the maturity of the bonds being offered matches the signalled length ofthe guarantee scheme.
The sale is of $50 million first ranking, secured fixed-rate bonds, with the ability to sell a further $25 million in over subscriptions.
The bonds mature on October 8, 2010, and the maturity can be extended by a year if the Deposit Guarantee Scheme is extended.
The bonds pay the higher of 8.25 per cent per annum or a margin of 2.25 per cent above the interpolated swap mid rate to October 8 2010.
Forsyth Barr is lead manager and is expected to underwrite up to $50 million of the sale.
The bonds will be sold to clients of NZX primary market participants and will trade on the exchange's debt market.
A prospectus is expected to be issued in mid-November.
PGG Wrightson has about $45m of existing domestic bonds on issue. It does not lend money to its parent.
The company had been planning a bond sale prior to the announcement of the deposit guarantee scheme.
The sale by the non-bank institution comes at a time when banks are successfully raising money through the sale of debt instruments and equity.
