Kiwi Capital Funding Limited announces Perpetual Capital Note offer

20/04/2015

Kiwi Capital Funding Limited (KCFL) has today announced an offer of up to $150 million of Perpetual Capital Notes to the New Zealand public.

Proceeds of the offer will be used by KCFL to invest in regulatory capital instruments to be issued by Kiwibank, which will help Kiwibank meet its regulatory capital requirements under the Reserve Bank’s Basel III framework. If Kiwibank encounters severe financial difficulty or does not hold enough capital, the Kiwibank regulatory instruments may be converted into ordinary shares in Kiwibank or written off. If this happens, the returns on the Perpetual Capital Notes may change or investors could lose their investmen

The Perpetual Capital Notes are perpetual with no fixed repayment dates, although they may, subject to conditions, be repaid by KCFL or purchased by a related company.

Interest on the Perpetual Capital Notes is scheduled to be paid quarterly but will not be paid if conditions are not met. If an interest payment is not paid for any reason, it will never be paid. The interest rate on the Perpetual Capital Notes will be reset at five year intervals. The interest rate for the first five years will be set on 1 May 2014. The indicative margin range for the Perpetual Capital Notes is 3.65% to 3.95% per annum.

The Perpetual Capital Notes have a credit rating of BB- from Standard & Poor’s, reflecting their ranking behind other obligations of KCFL (subordination), discretionary interest payments and loss absorption features.

The Perpetual Capital Notes are complex securities and riskier than a bank deposit. They are not call deposits or term deposits with KCFL or Kiwibank and may not be suitable for many investors. The Perpetual Capital Notes are perpetual, non-cumulative, unsecured, subordinated securities. The Perpetual Capital Notes are not guaranteed by Kiwibank, the Government or any other person.

The Offer is expected to open on Monday, 4 May 2015 and close on Friday, 22 May 2015 at 5pm. Applications can only be made on the application form in the Investment Statement. Interested investors should contact one of the Joint Lead Managers to the offer (listed below) or their usual financial adviser to request a copy of KCFL’s Investment Statement for the Perpetual Capital Notes.

  • Deutsche Craigs - 0800 226 263
  • Forsyth Barr - 0800 367 227
  • Macquarie - 0800 742 737

Bruce Thompson, Communications Manager (04) 460 6831