Meridian offers fixed-rate notes

The Renewable Energy Notes are unsecured and unsubordinated debt securities maturing in 18 months or less, the state-owned company said in a statement. The securities are in three tranches – with the nine-month notes paying 5% annually, while the 12 and 18-month notes pay 5.25%.

By contrast, ANZ Bank is offering 3.5% interest for an 18-month term deposit, with a minimum NZ$5,000 investment. Interest rates offered on deposits have fallen as the central bank embarked on its steepest easing cycle since the official cash rate was introduced in 1999.

Meridian didn’t immediately provide the expected size of the sale, with spokeswoman Claire Shaw saying the notes are part of an ongoing programme. The minimum investment is NZ$2,000, with additional purchases in NZ$500 increments.

Meridian, which has a BBB+ debt rating with Standard & Poor’s, owns the Manapouri hydro power station, New Zealand’s largest, as well as the Tekapo A and B stations which tap the Waitaki River, a system that accounts for 25% of the nation’s power supply. It also owns the Te Apiti wind farm, which at 90 megawatts, is currently the biggest in the country.