Kiwibank says its credit growth is outstripping the incremental funding provided by central-bank facilities and deposit inflows, leading the borrower printing its inaugural Kangaroo covered bond on 16 September. Tim Main, Kiwibank’s Auckland-based treasurer, spoke to KangaNews about the deal.
Kiwibank has become the first New Zealand bank to test the waters for subordinated debt issuance since the Reserve Bank of New Zealand (RBNZ) revealed its new bank-capital requirements a year ago. The borrower says the impact of COVID-19 on its capital position and strong asset growth in 2020 propelled it to consider the transaction.
On 30 November, Kiwibank launched an indicative NZ$275 million (US$193.2 million) 10-year tier-two deal with an interest rate reset date in December 2025. The transaction is the first bank capital deal in the New Zealand dollar market since the Reserve Bank of New Zealand finalised new bank capital requirements in December 2019.
On 16 September, Kiwibank (A/A1/AA-) launched its debut, five-year, Kangaroo, soft-bullet, covered-bond deal. Indicative price guidance for the forthcoming deal is 75-80 basis points area over three-month bank bills. Pricing is expected on the day of launch, according to lead managers ANZ and UBS.