Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Savings & Loans launch innovative ‘Kauri Notes’

Media Release: 16 July 2007

Savings & Loans launch innovative ‘Kauri Notes’ offer

Savings & Loans, a leading professional financial service provider, has launched an innovative offer in New Zealand designed to generate a high return with the benefit of 100% capital protection provided by Merrill Lynch, one of the world's leading wealth management, capital markets and advisory companies.

Kauri Notes are a limited recourse interest bearing debt security intended to provide investors with a quarterly coupon at a 9.50% per annum return, featuring 100% principal capital protection from Merrill Lynch, and the likelihood of even greater returns upon redemption, which based on track record could be between 11.61 and 17.13%.

The product also features a guarantee of interest on the first eight coupon payments, strong and diversified exposure, a secondary market sell-back option, plus the impeccable track-record of the investment managers involved.

Savings & Loans Director Don Cowie said, “We are very pleased to be able to offer a product that provides a combination of high security, high performance and flexibility. The offer has already received strong interest from a broad range of the New Zealand investing public, and we believe will be a sensible part of any diversified investment portfolio.”

Savings & Loans Director Maurizio Piglia, who has had a professional funds management and treasury operations career in Italy and Switzerland over the last 15 years, was instrumental in the development of Kauri Notes.

Mr Piglia said, “We have worked hard with the New Zealand financial advisory and investment community to develop a product that combines all the features which we believe are appropriate for this investment market. As a result, Kauri Notes is an attractive, flexible, competitive, and stable product that is well suited to all market conditions.”

The offer opened on the 5 July 2007, closes on 27 July 2007 (with extension rights if needed to 30 August 2007), and requires a minimum investment of $5000.00.


Key features:

- Designed for all market conditions

- Regular fixed coupon generating quarterly income to investors, aiming for 9.50% annually

- Excess returns upon maturity will be paid back as uncapped redemption premium

- Strength of 100% underlying exposure to the Permal Fund, a portfolio of over 50 hedge funds with a Standard & Poor’s AA rating, and with proven record of Permal as a leading hedge fund manager.

- Guarantee of 100% of Investors capital and the first eight quarterly coupons provided by Merrill Lynch & Co., Inc

- The liquidity of a monthly sell back facility is available at Net Asset Value

- 7 ¼ year term

About Savings & Loans

Savings & Loans is a financial services company, established in 1995 and proudly 100% New Zealand owned. We provide quality financial services for individuals and businesses, focusing on tailoring solutions to suit each customer's specific circumstances. Everything we do is backed by our commitment to professional standards, quality and reliability.

Our services include attractive savings and investment products, flexible and competitive loan options, and expert independent mortgage brokering services and financial advice.

Savings & Loans is committed to customer satisfaction and complete transparency, straight talking, and integrity in everything we do.

Savings & Loans has five company directors: Denis Kirkcaldie, Don Cowie, Maurizio Piglia, Milenko Boric and Scott Masters. Together they have more than 120 years' experience in business and finance in New Zealand, the United Kingdom, Italy, Switzerland, the United States, Japan, Hong Kong, Malaysia, and Korea.

While Savings & Loans is operated by financial experts, we recognise that providing financial services is as much about people as it is about money. So when you invest with us or obtain finance from us, we tailor a solution to fit your personal circumstances and lifestyle.

More about Kauri Notes:

- Type of Security - Kauri Notes are limited recourse fixed term interest bearing debt securities.

- Issuer - This offer is being made by Savings & Loans Securities Limited in its capacity as trustee of the Savings & Loans Securities Trust No. 1 and not in any other capacity.

- Issue Price - $1.00 per Kauri Note.

- Issue Amount - $50 million.

- Scheduled Term - 7 years 3 months, with the Issuer having the right to redeem the Kauri Notes at any time within 3 months of maturity. The Kauri Notes may be redeemed early in certain other circumstances, the details of which are comprised within the terms of the Prospectus and Investment Statement.

- Use of Proceeds - The net proceeds from the issue of the Kauri Notes will be applied towards:

o the payment of all of the initial costs associated with this Offer, being 3.50% of the proceeds raised from the Offer; and

o the purchase of Prosper Notes - Series II issued by Merrill Lynch S.A.

- Principal - $1.00 per Kauri Note - To ensure that this amount is available to holders on maturity, the Issuer will rely on the capital guarantee provided by Merrill Lynch & Co., Inc in respect of the principal of the Prosper Notes - Series II. There are certain circumstances however, where the guarantee of the principal under the Prosper Notes - Series II will not be applicable, the details of which are contained in the Prospectus and Investment Statement.

- Coupons - 9.50% per annum payable in equal quarterly amounts. Coupons are of two types:

o fixed coupons ("Fixed Coupons"), which are the first eight quarterly coupons payable in respect of the Kauri Notes. Savings & Loans Securities expects that these first eight quarterly coupons will be fixed having regard to the fact that Merrill Lynch & Co., Inc. have guaranteed the payment by Merrill Lynch S.A to Savings & Loans Securities of the first eight quarterly coupons of 2.375% each payable in respect of the Prosper Notes - Series II. The amounts payable by Savings & Loans Securities to holders of Kauri Notes in respect of the Fixed Coupons will ultimately reflect the amounts received by Savings & Loans Securities under the Prosper Notes - Series II.

o performance coupons ("Performance Coupons") which are dependent on the subsequent performance of the Prosper Notes - Series II investment in the Permal Fund. In the event that the performance of the Prosper Notes achieves a return of less than 9.50% per annum, then with the exception of the first 8 interest payments, the noteholder may receive an interest return less than 9.50% per annum.

- Redemption Premium - The accumulated returns on the Prosper Notes - Series II at maturity which have not been distributed either as Fixed or Performance Coupons will be distributed to Kauri Noteholders as redemption premium.

- First Coupon - The first coupon payment will be paid to the original subscriber for each Kauri Note irrespective of any subsequent transfer of the Kauri Note before the first coupon payment date (Interest to original subscriber "ITOS").

- Fees - Other than the subscription price payable to subscribe for a Kauri Note, and in respect of the fees applicable to the early redemption of the Kauri Notes by a noteholder no entry or management fees are payable by a holder of Kauri Notes.

- Minimum Investment and Term - $5,000 and thereafter in multiples of $1,000. The term of the Kauri Notes is 7 years and 3 months.

- Limited Recourse - The Kauri Notes are limited recourse obligations of Savings & Loans Securities. This means that Savings & Loans Securities is obliged to make payments on the Kauri Notes only to the extent that it has money available to it from the Prosper Notes - Series II whether or not this is sufficient to repay the Principal or pay any Interest.

- Security - The obligations of the Issuer under the Kauri Notes will be secured by a first ranking security interest over the Prosper Notes - Series II to be acquired by the Issuer.


© Scoop Media

Business Headlines | Sci-Tech Headlines


TradeMe: Property Prices In Every Region Hit New High For The Very First Time

Property prices experienced their hottest month on record in December, with record highs in every region, according to the latest Trade Me Property Price Index.\ Trade Me Property spokesperson Logan Mudge said the property market ended the year with ... More>>

Motor Industry Association: 2020 New Vehicle Registrations Suffer From Covid-19

Chief Executive David Crawford says that like some other sectors of the New Zealand economy, the new vehicle sector suffered from a case of Covid-19. Confirmed figures for December 2020 show registrations of 8,383 were 25% ... More>>

CTU 2021 Work Life Survey: COVID And Bullying Hit Workplaces Hard, Huge Support For Increased Sick Leave

New data from the CTU’s annual work life survey shows a snapshot of working people’s experiences and outlook heading out of 2020 and into the new year. Concerningly 42% of respondents cite workplace bullying as an issue in their workplace - a number ... More>>

Smelter: Tiwai Deal Gives Time For Managed Transition

Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed to working on a managed transition with the local community,” Grant Robertson said. More>>


OECD: Area Employment Rate Rose By 1.9 Percentage Points In The Third Quarter Of 2020

OECD area employment rate rose by 1.9 percentage points in the third quarter of 2020, but remained 2.5 percentage points below its pre-pandemic level The OECD area [1] employment rate – the share of the working-age population with jobs – rose ... More>>

Economy: Strong Job Ad Performance In Quarter Four

SEEK Quarterly Employment Report data shows a positive q/q performance with a 19% national growth in jobs advertised during Q4 2020, which includes October, November and December. Comparing quarter 4, 2020, with the same quarter in 2019 shows that job ad volumes are 7% lower...More>>

NIWA: 2020 - NZ’s 7th-warmest Year On Record

The nationwide average temperature for 2020, calculated using stations in NIWA’s seven-station temperature series which began in 1909, was 13.24°C (0.63°C above the 1981–2010 annual average). New Zealand’s hottest year on record remains 2016, when... More>>

Quotable Value New Zealand: Property Market Set To Cool From Sizzling To Warm In 2021

Nostradamus himself could not have predicted the strange series of events that befell our world in 2020 – nor the wild trajectory of New Zealand’s property market, which has gone from “doom and gloom” to “boom and Zoom” in record time. Even ... More>>