Savings Product Review: Hellaby Capital Notes

Monday 22nd May 2006

What is it called and what sort of savings product is it?
Hellaby Capital Notes.

Who is the company behind it?
Hellaby is an NZX-listed investment company whose investments include No 1
Shoe Warehouse, Hannahs and The BBQ Factory.

Who is the target market?
Investors wanting an income investment which offers and attractive return
and has some liquidity as it is tradable on the stock exchange’s debt
market.

What return does it offer?
The notes have an interest rate of 8.50% a year.

When was it launched?
Details were announced on Friday 19th May 2006 and the offer opens on May 24.

What other products is it like or is it competing with?
Other listed debt securities mainly.

Is it long term, short term or medium term?
The notes have a term of five years, maturing in 2011.

What is the unique selling point?
Hellaby is a successful investment firm which has generated total
shareholder returns of 28.2% annually over the past five years, compared
with an NZSX top 50 average of 14.7%. The money raised will be used by the
company to further implement its strategy and continue to deliver
shareholder returns through acquisitions and organic growth, the company
says.

How strong a stomach do you need for it?
This is a mildly risky investment which has the benefit of being tradable
so investors can sell up before maturity if they so choose.

What's the hitch?
That management don’t perform and the company fails to continue delivering
good returns.

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