Investors Hungry for Investment Commodity Bonds

Media Release

Investors Hungry for Investment Grade Commodity Bonds - Macquarie Expects Demand to Exceed $100 Million

17 August 2006 - Investors’ appetite for strong yielding investment grade fixed interest securities is being demonstrated by the rapid uptake of Commodity Bonds created by Macquarie Equities associate Generator Bonds Limited*.

Macquarie Equities Head of Financial Services, John Rowley, said: “Subscriptions for the $100 million-plus capital raising opened just two weeks ago, yet already the public has subscribed more than $50 million.”

“We are very pleased with the uptake for this strong yielding investment grade rated instrument**.

“Typically the flow of funds for any offer is strongest in the period immediately before the closing date.”

The “early bird” interest rate of 8.2%, and nationwide seminars, has added to the appeal.

“We have been running seminars across the country focussed on the importance of diversification in any portfolio. Investors appear to be keen to diversify their portfolios and are welcoming this opportunity to add investments linked to a sector that has few ties with the New Zealand economy and very little with international share prices,” Mr Rowley said.

Commodity Bonds are able to offer a higher interest rate than other traditional fixed income investments because of this “commodity price risk” to their principal. The repayment of principal on Commodity Bonds depends upon the prices of the commodities selected by the manager, TCW Asset Management Company (a subsidiary of Societe Generale Asset management), staying above specified levels (most of these levels are lower than historic record low prices, in real dollar terms).

When issued on 7 September 2006, the Commodity Bonds will be for a fixed term of five years and will carry a coupon with a fixed yield of 8.2 per cent paid quarterly1. It is expected that on this date Commodity Bonds will receive a credit rating within investment grade from Standard & Poor’s, a leading credit rating agency.2“

The bonds are provisionally scheduled to begin trading on the New Zealand Stock Exchange’s debt market (NZDX) on 14 September3.

The Commodity Bond offer seeks to raise $100 million, with provision for oversubscriptions of a further $100 million. It will close on 31 August 2006.

“We are very confident that the offer will pass the $100 million target,” Mr Rowley said.

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*Commodity Bonds are issued by Generator Bonds Limited in its capacity as trustee of the Commodity Bonds Trust and constitute first ranking secured obligations of Generator Bonds Limited, in its capacity as trustee of that trust.

The combined Prospectus and Investment statement (“the Offer Document”) has been registered with the New Zealand Companies Office. For more information about the offer and to obtain a copy of the Offer Document, please contact the issuer on 0800 436 378 or your investment adviser.

Investments in Commodity Bonds are not deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 nor any member of the Macquarie Bank Group and are subject to investment risk, including possible delays in repayment and loss of income and or principal invested. None of Macquarie Bank Limited, Generator Bonds Limited, Macquarie Equities New Zealand Limited, Macquarie New Zealand Limited or any other member of the Macquarie Bank Group guarantees any particular rate of return on the Commodity Bonds nor do they guarantee the repayment of the principal of the Commodity Bonds. Macquarie Bank Limited is a company incorporated in Australia and authorised under the Banking Act 1958 (Australia) to conduct banking business in Australia. Neither Macquarie Bank Limited nor any member of the Macquarie Bank Group are registered as a registered bank in New Zealand under the Reserve Bank of New Zealand Act 1989 (New Zealand). The minimum investment in Commodity Bonds is $5,000 and the bonds must be held until the quarterly interest payment dates to receive payments of interest. Applications to invest in Commodity Bonds can only be made on the application form attached to the Offer Document.

**In general, it is unlikely to be appropriate for investors to invest more than a small proportion of their overall investment portfolio in Commodity Bonds. See the combined Prospectus and Investment statement for details of the risks applicable to an investment in Commodity Bonds.

1The final interest rate is to be determined at the close of the offer period and may be higher.

2An application has been made to Standard & Poor’s for a rating of the Commodity Bonds. A credit rating is not a recommendation to buy, hold or sell the securities; nor does it attest to the suitability of an investment in the securities by any individual investor. Any rating is subject to revision, suspension or withdrawal at any time by Standard & Poor’s.

31Application has been made to NZX for permission to list the Commodity Bonds, and all the requirements of NZX relating thereto that can be complied with on or before the date of the distribution of this media release have been duly complied with. However, NZX accepts no responsibility for any statement in this media release.

ENDS

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