Originally Posted by
Roger
KCF010 - Here's an example of what HNZ could do to bolster its ROE. Kiwibank issued capital notes that I presume meet the Reserve Bank's requirements for capital at 6.61%.
The current super low interest rate environment provides an ideal opportunity for HNZ to follow suit. Note this $100m tranche issued at 6.61% currently trades at well under 6%.
Looking through the NZDX market this morning there's nothing of substance there paying more than 6% so I reckon they could get a long term issue away, say $100m at very close to 6% and then do a buy-back of shares !! Get on to it I reckon.
P.S. Yes, confirmed to meet Basel 111 capital requirements, currently trading at only 5.75%.
Percy, you know management well, do you want to get on to sending them an e.mail and suggesting this.
Here's the original media release
HNZ don't need to re-invent the wheel here, just copy it at say 6.25% and I reckon a $100m offer would fly out the door.