Westpac's 'red and black' bond pulled

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Westpac's "red and black'' bond, which was to have raised funds for the rebuilding of earthquake-ravaged Christchurch, has been pulled after failing to receive enough support.

The bond was to have had a five-year term and a 5.8 per cent a year interest rate, of which 0.5 per cent would have been donated to the Christchurch Earthquake Appeal Trust.

"Unfortunately the minimum amount ($50 million) needed for the bond issue was not reached,'' a spokeswoman for the bank said.

"All money invested plus interest has been returned, and people can still donate to the rebuild via the Christchurch Earthquake Appeal Trust.''

The chief executive of Westpac Institutional Bank, David McLean, said in July the bond was an investment opportunity with the added benefit of helping the people of Christchurch.

"The Red & Black Bond provides an opportunity for New Zealanders to support the recovery of Christchurch with investors to donate a fixed portion of the interest earned on each bond to help rebuild community projects such as sports and cultural facilities and community halls,'' he promised.

The bond had the support of UBS New Zealand, First New Zealand Capital, Forsyth Barr, Macquarie, NZX, Chapman Tripp, Link Market Services and Colenso BBDO.

The minimum offer amount was $50m but the bank expected to raise up to $400m from the issue.

One bond market source said the issue was always going to struggle.

He said people who invest in bonds are typically philanthropic, but like to keep their investing separate from their charitable activities.

In the case of red and black, the two together did not mix, he said.