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Heartland holds excess cash ahead of government guarantee expiry

Heartland New Zealand says it continues to hold more cash than it needs ahead of the expiry of its government guarantee on December 31.

Tuesday, November 8th 2011, 3:56PM

by Jenny Ruth

Heartland says it held $496 million of cash, liquid assets and unutilised available funding lines at October 31, nearly $200 million more than is required by its trust deed and more than 1.5 times the value of guaranteed term deposits maturing before the guarantee expires.

The company says liquidity reduced during October because of the scheduled repayment of the $92.3 million in PGG Wrightson Finance bonds which was repaid from Heartland's cash reserves.

Heartland bought the Wrightson finance company on August 31 after which it had $678 million in liquid assets.

The company says the overall quality of its retail deposit base has improved "with the progressive purging of guarantee-chasers and replacement with a depositor base which is more bank-like."

Its retail deposit reinvestment rate for the 10 months ended October 31 was stable at 73% and October was a record month for new fund inflows, it says.

While it doesn't say how much investment it received in the month, it says 99.3% and 91.9% of reinvested term deposits were either non-guaranteed or for a term beyond the expiry of the guarantee.

« Infratil launches $50m five-year bonds with 8% couponContact increases 30-year bond issue to a maximum $250 million »

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