$225m in Kauri bonds

The Asian Development Bank has raised $225 million in its first Kauri bond sale.

A Kauri bond is a New Zealand dollar denominated bond, registered in New Zealand and issued by a foreign issuer. The first Kauri bonds were issued in 2004 and there was a sharp spike in issuance after the Reserve Bank of New Zealand decided in 2007 to accept AAA rated Kauri bonds as security in domestic central bank operations, according to a paper published by the RBNZ in 2008.

The Asian Development Bank bonds were issued yesterday and have a coupon rate of 5.375 per cent a year payable semi-annually. The bonds mature on January 29, 2014.

They were priced to yield 62 basis points over the 6.5 per cent New Zealand government bond due April 2013.