KEY POINTS:
Local investors seem to be wary of placing their money with finance companies these days, and trading banks are reaping the benefits of this "flight to quality".
Two bond issues this month - one by ANZ and one by BNZ - are both on the way to being massively oversubscribed.
Figures released in an interest.co.nz newsletter today reveal the high levels of support the two banks' issues are garnering.
ANZ National said it has received NZ$650 million of applications for its perpetual bond issue and BNZ Income Securities added it is expecting to raise more than NZ$350 million from its issue of perpetual tier 1 shares, the newsletter said.
The issues offer A plus credit ratings and 10 per cent yields.
BNZ said it has already received NZ$320 million of firm bids since the offer opened in early March. The BNZ offer is a Portfolio Investment Entity (PIE), attractive to retail customers as it offers tax savings for investors in the 33 per cent and 39 per cent tax brackets.
The ANZ issue is aimed more at institutional investors.
Meanwhile, finance companies are still reeling from the fallout of the string of collapses in the industry in 2007. Investments in finance company debentures fell almost NZ$1 billion in the December quarter, the newsletter reported.
- NZHERALD STAFF
