Post bonds struck at 7.5%

NZ Post sets 7.5% rate on step-up notes, to raise NZ$200 mln

March 24 – New Zealand Post Group Finance set the interest rate on its note issue at 7.5% and said investor demand means it will accept all oversubscriptions, raising NZ$200 million.

The notes pay annual interest through until Nov. 15, 2014, the reset and step-up date. The initial margin is 2.8%, the postal service’s finance unit said in a statement.

All NZ$200 million of the notes will be sold to clients of investors who participated in its bookbuild and there won’t be a public pool. The debt matures in November 2039.

The offer opens on March 25 and closes on April 22. NZ Post joins companies including Vector Ltd., New Zealand’s No. 2 electricity and gas distributor, in eyeing the debt market to raise funds as dwindling deposit rates spur investors to seek higher returns. Contact Energy, Fonterra Cooperative and Auckland International Airport in tapping the debt market for funds. Contact pays annual interest of 8% on the five-year bonds it sold this month.

ANZ Bank is offering 3.5% on a two-year term deposit for amounts over NZ$5,000. Bank of New Zealand offers just 2% and Kiwibank offers 5%, according to the Good Returns website.

(Businesswire)

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