BNZ Perpetual Preference Shares - BNZHB

[Grimy]

The BNZ bank is issuing a new Perpetual Preference Share, with a likely rate of around 7.00% per annum.
This interest rate will be fixed for a six-year term, with distributions paid quarterly.
The investment is perpetual, but with a likely redemption date in six years.

The PPS will constitute additional Tier 1 capital for BNZ’s regulatory capital requirements and will have an investment-grade credit rating of BBB.
BNZ Bank itself has a strong credit rating of AA-.

[Perky]

Hi Grimy, are there any major reasons you’d buy these over the BNZHA @. 7.30% with the 2029 maturity?

Asking for a friend

Have placed a small order for the BNZHB

[Grimy]

No reason at all. I see that at the sell price of $1.02 that BNZHA are yielding 7.15% and this new issue should be near to that.
No brokerage either on the new ones.
And with lower rates on the way, the new ones stretch the return out another year.
I've only bought a small amount too - would have got more, but some bills in my not-to-distant future......

[Perky]

Thank Grimy, appreciate your contribution on this thread. I’m new to buying this type of instrument. Been mainly shares but getting older and less risk required so have been slowing moving some money from expiring term deposits @ 6.4% in anticipation of interest rates dropping.

Have bought a few QHLA @ 0.88 on yours and legomans tip, a few IFTHC @ 1.00 but see they reset annually, bought a few BNZB so wait to see interest rate, been looking at BNZA and or ANBHD but no one will gift me any at my low buy price .lol

Thanks again for sharing your experience in this space for us newbies.
cheers
Perky

[GTM 3442]

Six years at seven percent. What does that tell us?

Does it tell us that ANZ expect interest rates to remain at or around current levels for longer than what the pundits are proposing?
Does it tell us that ANZ want new capital badly enough to pay seven percent into a falling interest rate environment to get it?

Or have I missed the plot entirely?

[mcdongle]

You have missed the plot entirely....... Its BNZ

[Perky]

Well if you want you can buy ANBHD and get paid 7.6% for 6 years if you prefer ANZ to BNZ

[Perky]

Well the results are in…

They asked for


Bank of New Zealand (BNZ) has launched an offer of up to NZ$100 million (with the ability to accept oversubscriptions at BNZ's discretion) of perpetual preference shares (PPS 2).

and they got

Bank of New Zealand (BNZ) confirmed today that the offer of perpetual
preference shares (PPS 2) is now closed and the issue size has been set at
NZ$450 million.

Just waiting for the distribution rate later today. margin set at 3.50%

[Perky]

[QUOTE=GTM 3442;1064501]Six years at seven percent. What does that tell us?

Today’s result tells me there was a ****load of money happy to find a home at 7.28 % because the next available bus that comes along probably won’t start with a 7.

Bank of New Zealand (BNZ) has set the initial distribution rate for the
NZ$450 million perpetual preference shares (PPS 2) at 7.28% per annum. This
equals the margin of 3.50% plus the 6-year swap rate. This distribution rate
will apply for the first 6 years until the first optional redemption date (21
August 2030).