Rates round-up: September 10

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Monday, September 10th 2012, 7:10AM

APN bond blowout

New Zealand Herald owner APN News & Media has seen its bond yields rise as its share price continues to fall in a tough market for newspapers and media in general.

The yield on APN's $100 million of NZX-listed bonds rose last week from 9% to 13.5% after bonds were sold at 84.38c in the dollar.

The rise in bond yields parallels a decline in APN's share price, which fell from 70c to 44c in the last month.

Fairfax reported comments from APN's second-largest shareholder, fund manager Allan Gray (which owns about 18% of APN), placing the blame on APN chief executive Brett Chenoweth for the market's lack of faith in the company.

Chenoweth, a former investment banker, blamed a "blood-in-the-water" mentality around media stocks.

APN posted a net loss of A$319 million ($410m) in the six months to June 2012 after a A$485m write-down of its New Zealand publishing assets including the rebranded Herald, which launches today in tabloid format.

ASB cuts term deposits

The bad news for savers has continued, with ASB the latest bank to cut its term deposit rates for terms of one year and longer.

ASB has cut its one-year rate by 20 basis points from 4.20% to 4.00% and its eighteen-month term deposit rate by 15 basis points from 4.25% to 4.10%.

It has made its biggest changes in the two- and three-year terms, which have both been cut by 35 basis points. The two-year rate has dropped from 4.50% to 4.15% and the three-year rate has fallen from 4.75% to 4.40%.

Long-term rates have been reduced by more modest amounts, with the four-year rate being cut by 15 basis points from 4.90% to 4.75% and the five-year rate dropping 10 basis points from 5.10% to 5.00%.

The cuts place ASB among the lowest of the main banks for term deposits, with its one-year rate 30 basis points below Kiwibank, Westpac and the BNZ and its two-year rate 45 basis points below Westpac's.

ANZ launches $200m bond issue

ANZ New Zealand has launched a five-year bond offer seeking at least $200 million, but could raise a lot more if the offer is popular with investors.

This is because although ANZ is looking to raise at least $200 million with its offer of direct, unsecured, unsubordinated bonds, it's open to unlimited oversubscriptions, with a minimum investment of $10,000.

The bonds will pay a margin of 1.75% over the five-year swap rate, which based on the current swap rate will equate to just under 5%.

The offer opened last Monday and will close tomorrow, when the rate will be set. The bonds will be issued on September 18 and mature on the same date in 2017.

The new ANZ bond offer comes after it called a $350 million issue in July instead of resetting for another five years at 62 basis points over the five-year swap rate.

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