Kiwibank to offer tradeable preference shares to raise $100m

Kiwibank is planning to raise up to $150 million in tier one capital early next month through an issue of preference shares, listed on the NZX.

The move is unusual for a state-owned enterprise, although they are major issuers in the domestic and international bond markets. 

The shares will be issued by a subsidiary called Kiwi Capital Securities Ltd, with the ultimate owner being Kiwibank's parent, New Zealand Post. 

Kiwibank is seeking preliminary expressions of interest in an offer of up to $100 million in perpetual callable non-cumulative preference shares, to be known as Kiwi Income Securities, with the option of up to $50 million over-subscription. 

"The proceeds from the issue of the shares are to be ultimately used to provide tier 1 capital to Kiwibank Limited," the bank says. 

"The shares are not shares in Kiwibank, but are shares in Kiwi Capital Securities.  The shares will not entitle holders any voting rights in relation to Kiwibank, and only limited voting rights in relation to Kiwi Capital Securities." 

The shares will have no maturity date, but will be callable (repaid at the bank's option) at the fifth and tenth anniversary of their issue date, and quarterly beyond that. 

The shares will pay a fixed rate for the initial five years and then reset for subsequent five-yearly periods at the margin plus the swap rate applying at the time, with dividends paid quarterly. 

An announcement of the margin and the minimum dividend rate for the shares is expected when the offer opens, anticipated for early April, and will include an Investment Statement and prospectus.

Businesswire.co.nz

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