Kiwibank happy with shares offer

Kiwibank has had no trouble selling preference shares in a related company which pays a minimum dividend rate of 8.13 per cent per annum for the first five years.

The state-owned bank has previously signalled the sale of up to $150 million of perpetual callable non-cumulative preference shares, to be known as Kiwi Income Securities. The shares in Kiwi Capital Securities have similar characteristics to debt instruments. Kiwibank said yesterday the offer was oversubscribed in the bookbuild process and had been largely allocated to financial intermediaries and institutions.

Oversubscriptions of $40 million have been accepted in the bookbuild process and a pool of up to $10 million has been established for clients of Kiwibank. If this pool is fully subscribed, the issue size will be $150 million. No pool of shares is available for direct sale to the public.

The dividend rate for the first five years will be set on May 3. It will be 2.90 per cent above the five-year swap rate on that date or at the minimum dividend rate, whichever is the higher.

"We are delighted with the support shown for the offer," said Richard Schofield, Kiwibank's treasurer.

The money raised will provide tier 1 capital for Kiwibank. The shares have no maturity date but may be called on the fifth and 10th anniversary of their issue date and quarterly thereafter. They have been assigned a credit rating of BBB by Standard & Poor's.

The shares are in Kiwi Capital Securities and do not entitle holders any voting rights in relation to Kiwibank.

ANZ National Bank is the offer's arranger. Joint lead managers are ANZ National and Kiwibank.

- NZPA