Tower just gets minimum for bond offer
Tower raised $81.7 million of the April 2014 bonds, less than the maximum $100 million it was willing to issue including over-subscriptions. Tower will use the funds to repay bank debt.
The sale contrasts with New Zealand Post Group Finance’s offering, which investors snapped up without the need for a public pool, raising $200 million. Post set the rate at 7.50% for its bonds, which have an A rating with Standard & Poor’s.
Investors also clamored for Fonterra’s $300 million of six-year bonds paying a minimum 7.75%. Tower’s bonds are unrated though the company has a BBB- rating with AM Best Company.
“Tower isn’t a Fonterra or an NZ Post,” said Alan Moore, who helps manage $250 million at Milford Asset Management. “Tower looks as if it’s going alright but there’s been a lack of market confidence.”
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