ANZ, BNZ may make call on high-coupon notes, sending $1.28B looking for new home
By Jonathan Underhill
Jan. 10 (BusinessDesk) – Some $1.28 billion of investment funds could be looking for a high-yielding home in the next
few months amid speculation ANZ New Zealand and a local unit of National Australia Bank will call hybrid notes they sold
in 2008 when interest rates were high.
ANZ has $835 million of perpetual callable subordinated bonds with a first call date of April 18. They carry a coupon of
9.66 percent, deemed reasonable in 2008 though since then bond yields have fallen by at least 300 basis points.
BNZ Income Securities, a special purpose vehicle of NAB, has about $450 million of perpetual non-cumulative shares which
come up at the end of March and have a coupon of 9.89 percent.
“The banks have got a lot of money – there’s a reasonably strong chance they will call those investments,” said James
Smalley, a client adviser at brokerage Hamilton Hindin Greene. “That’s going to continue to underpin our market going
forward in a low interest rate environment.”
ANZ spokesman Peter Barnao said no decisions have been made yet on the perpetual bonds and any announcement would need
to go to the NZX first. BNZ spokeswoman Emily Davies also said no decision had been made.
ANZ last year called and repaid $350 million of subordinated bonds issued in 2007 with a coupon of 8.23 percent. BNZ
also called $350 million of subordinated bonds sold in 2007 with a coupon of 8.42 percent.
The banks could also elect to re-set the interest rate on their securities or make a new issue.
(BusinessDesk)