Bank of New Zealand - Subordinated Bond Issue

21 May 2007

Bank of New Zealand - Subordinated Bond Issue

Bank of New Zealand (“BNZ”) is considering making an offer of up to NZ$ 300 million of subordinated bonds to the public, with the right to accept over-subscriptions.

It is intended that the issue will open, close and price by mid-June. Proceeds of the issue will be used for general corporate purposes.

The bonds that BNZ proposes to offer will pay a fixed rate of interest semi-annually. The final maturity will be 10 years, however BNZ is able to call the issue after 5 years.

The bonds will be unsecured, subordinated debt obligations, issued under a Deed Poll and Investment Statement.

The interest rate payable on the bond issue will be set at the aggregate of a set issue margin and the 5 year mid-swap rate. If the issue is not called after 5 years, the issue margin on the bonds will be increased by 0.50%

BNZ is seeking preliminary indications of interest for the bonds. Indications of interest from wholesale investors and NZX market participants should be directed to Bank of New Zealand. Contact details for Bank of New Zealand are given below.

No indication of interest will create an obligation or commitment of any kind. No money is currently being sought and no applications for bonds will be accepted or money received unless the subscriber has received an investment statement.

Bank of New Zealand’s contact details:

ENDS

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