ASB to offer up to $100 million of five-year fixed rate notes

Monday 20th February 2017

ASB Bank is offering up to $100 million of listed fixed rate notes with a maturity date of Feb. 24, 2022 and it can accept unlimited oversubscriptions at its discretion.

The notes have an indicative margin of 1.15-to-1.25 percent per annum and will be offered to institutional and retail investors in New Zealand and certain offshore institutional investors, ASB said in a release to the New Zealand stock exchange. The funds will be used for general business purposes, it said.

Banks have been struggling to raise enough funds via term deposits to match their rapid credit growth over the past year, and have increasingly turned to more expensive overseas wholesale funding options. At the same time, the NZX debt market has been increasingly attractive for companies to raise money due to the persistence of the current low interest rate environment.

ASB's offer opens Feb. 20 and is expected to close Feb. 22. The notes are expected to be issued Feb. 24. ASB said the margin for the notes and the interest rate will be set following a bookbuild process on Feb. 22 and will be announced by ASB via NZX shortly thereafter.

The notes are expected to be quoted on the NZX debt market and are likely to be rated AA- by Standard & Poor's and Aa3 by Moody’s prior to the issue date. There is no public pool for the notes. The minimum application amount in respect of the Notes is $5,000 and in multiples of $1,000 thereafter, ASB said.

BusinessDesk.co.nz

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