Heartland Bank's trading halt has been lifted after the bank raised $20 million from institutional investors at $1.46 per share, a 4.6 per cent discount to the last trading price.
The bank said yesterday that it wants to raise up to $30m through a combination of the bookbuild and a share purchase plan which will offer New Zealand-resident shareholders up to $15,000 worth of shares each. The funds raised will help maintain the lender's capital ratio after a period of strong credit expansion and also support its digital strategy.
Heartland said the final terms of the share purchase plan will be announced after its first-half earnings are published in February, but noted the shares will be offered at a discount. Following this, the bank may issue Tier 2 capital "with a view towards optimising its capital position," it said.
Yesterday's institutional placement "was well supported by Australian and New Zealand investors and we welcome a number of new investors to our register as a result," Heartland said. Settlement and allotment of the new shares will occur on December 15.
Heartland has to hold capital equal to 10.5 per cent of its risk-weighted assets, and a $30m equity raise will strengthen its capital ratio as of November 30 by about 0.9 per cent, according to its investor presentation. The bank's capital ratio declined to 12.42 per cent in November from 13.78 per cent in June and 12.71 per cent in November.
