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Rates Round Up for Sept 22

BNZ removes PIE fees; Greenstone bond issue oversubscribed at $147 million; $27 billion missing out on interest: BNZ removes cash PIE management fee; Public Trust assigned backed Aaa deposit rating from Moody's; TrustPower launches 7 year senior bond

Friday, September 24th 2010, 6:50AM

$27 billion missing out on interest
There is more than $27 billion of retail funding sitting in transaction accounts each month, which typically give no or low interest on your money according to a RaboDirect savings and investment survey.

RaboDirect's research shows more than 50% of New Zealanders leave more money in their transaction accounts each month than is necessary to cover expenses and these people are potentially missing out on interest that is available to them.

The survey has also shown a change in savings and investment priorities for New Zealanders' over the past four years with security becoming a key focus.

The first survey in 2007, conducted just before the collapse of a major New Zealand finance company, showed high interest was the number one priority for most people (72%), with just 30% considering security when investing.

However, the 2010 survey shows a complete reversal, with security of money the first priority (73%) and high interest rate second (52%). Fees and charges ranked third (47%), followed by access to money (46%) and the reputation of the financial institution (39%).

Greenstone bond issue oversubscribed at $147 million
Greenstone Energy's retail bond issue has closed, having raised $147 million, including $47 million in oversubscriptions. The funds will be used to repay bank debt.

Greenstone is the New Zealand company which in April acquired the retail and distribution assets of Shell New Zealand. Greenstone is jointly owned by Infratil and the New Zealand Superannuation Fund.

Greenstone chief executive Mike Bennetts says the success of the Greenstone retail bond issue and the backing of the company's shareholders would enable Greenstone to continue to invest in the infrastructure needed to safely and reliably meet the country's fuel requirements.

ANZ director of Debt Capital Markets Chris O'Neale says "The Greenstone issue is a pleasing continuation of a trend of new corporate issuers coming to market seeking access to longer dated funding".

Public Trust assigned backed Aaa deposit rating from Moody's
Moody's Investors Service has assigned a backed long-term deposit rating of Aaa with a stable outlook to Public Trust.

The rating covers deposits in the Common Fund, which are guaranteed under the Public Trust Act 2001. Interest on these deposits is guaranteed under the Public Finance Act 1989. Neither guarantee is limited by time, quantum of investment or class of investor.

Moody's says the backed Aaa rating reflects the fact that deposits of Public Trust are guaranteed by the New Zealand Government. "The outlook for the backed rating is stable, in line with that of the New Zealand Government,"

BNZ removes cash PIE management fee
BNZ has removed its cash PIE management fee which in turn has raised its equivalent gross return rates.

For the 33% tax rate the comparative annual rate has gone up 45 basis points to 4.15% and the 38% tax rate has gone up 48 basis points to 4.48%.

TrustPower launches 7 year senior bond
TrustPower has announced a $75 million senior bond offer with an ability to accept up to $25 million of oversubscriptions.

The interest rate has been set at 7.1% and it is payable quarterly with the maturity date set for 15 December 2017.

The closing date for the offer is 20 October and the minimum subscription is $5000 and $1000 thereafter. The bond will be listed on the NZDX market under stock code TPW100.

 

« SCF trustee pays out $350m to bondholdersSCF woes sparked Hubbard complaint »

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