Rates Round Up: Dec 6
RaboBank's BankaRate deposits snapped up in 24 hours; Infratil returns to bond market; Moody's assigns rating to BNZ covered bonds.
Monday, December 6th 2010, 6:04PM
RaboBank's BankaRate deposits snapped up in 24 hours
Investors snapped up all RaboDirect's six-month BankaRate term deposits in just 24 hours, said RaboDirect general manager Mike Heath.
"The six-month term deposit rate, at 6%, was the clear favourite of the BankaRate range. The first offer sold out within 24 hours," he said.
"As the country emerges from recession Kiwis are gravitating towards term deposits, which are typically viewed as a safer investment option. But while adjusting to an uncertain economic environment, people are not keen to lock their money away for long periods of time."
BankaRate offers a limited number of exclusive term deposit rates that are typically higher than comparable offerings from the major banks on a ‘first in, first served' basis.
It was launched after a successful trial and Heath said customers are beginning to benefit from the increased competition between banks for retail deposits.
"The six-month term deposit is particularly popular among New Zealanders - and having that top rate attached through BankaRate, from the country's only triple A rated bank, makes it a really attractive proposition."
Infratil bond issue
Infratil has announced it is considering making an offer of Infrastructure Bonds.
The Infrastructure Bonds are likely to have a tenor of approximately five years and will constitute a new series under Infratil's Infrastructure Bond programme and will be issued on terms similar to existing dated Infrastructure Bonds.
The net proceeds will be used for general corporate purposes including repaying debt and lengthening the maturity profile of total debt facilities.
The offer is likely to consist of two tranches, with the first tranche available to all New Zealand investors and the second for holders of existing Infrastructure Bonds.
Moody's assigns rating to BNZ covered bonds
Ratings agency Moody's has assigned a definitive long-term rating of Aaa to Bank of New Zealand's Series 3 covered bonds issued under the terms of its $3 billion global covered bond programme.
Bank of New Zealand issued EUR1 billion fixed-rate Series 3 covered bonds with a seven-year hard-bullet maturity.
As with all covered bonds, they benefit from two layers of protection having recourse to both the issuer and a collateral pool.
The rating took into account factors including the credit strength of Bank of New Zealand, rated Aa2, the value of the cover pool and a commitment by the bank to maintain an asset percentage of 97%, which translates into an over-collateralisation of around 3.09%.
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