Sharechat Logo

The Reserve bank’s temporary ban affects more than $1b of securities

Thursday 2nd April 2020

Text too small?

The Reserve bank’s temporary ban on dividends and debt redemptions affects more than $1 billion of bank securities. 

 “To further support the stability of the financial system during this period of economic uncertainty, we have agreed with the banks that during this period there will be no payment of dividends on ordinary shares, and that they should not redeem non-[common equity tier one] capital instruments,” said deputy governor and general manager for financial stability Geoff Bascand.

“This initiative further supports the stability of the financial system by maintaining higher levels of capital during the period of falling economic activity resulting from the Covid-19 pandemic,” he said.

The restrictions will stay in place until further notice.

Several banks have made disclosures to the NZX that their securities would be impacted.

For example, ANZ said the change meant it would not be able to redeem $500 million of capital note on the May 25 optional exchange date. The bank said the RBNZ restrictions did not affect its ability to pay interest on the notes. 

The BNZ and Kiwibank are also affected. BNZ disclosed that it was unlikely to gain permission to redeem its $550m of subordinated unsecured notes in December as it had the option to do. Kiwibank also disclosed that its option to redeem $150m of perpetual bonds and $150m of perpetual capital notes in May could not be exercised.

ASB and Heartland are not affected by this recent ban.

This article is based on an article in the NBR today by Tim Hunter 

Source: NBR


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland Market Update
Steel & Tube Fy20 Trading Update
Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria

IRG See IRG research reports