Westpac NZ adds another NZ$100 million to guaranteed 2014
- Wednesday, 05 August 2009
A Westpac NZ source says the increase was placed with an exclusively domestic investor base although no further distribution details have been released. Demand for guaranteed paper in New Zealand is still focused on the 2014 maturity with both outstanding bank guaranteed lines – from Westpac NZ and Bank of New Zealand (BNZ) (AA/Aa2) – having five-year tenors.
The source says the concentration on five-year paper is a product of no more than where current investor interest is focused, adding the conviction that "we will see different maturities in time when demand spreads from this part of the curve".
Between the Westpac NZ 2014, the increase to which brought the total in the issuer's only outstanding guaranteed line to NZ$675 million, and BNZ's line there is now a total of NZ$1.375 billion of guaranteed bank bonds outstanding in New Zealand. All that volume has been issued in 2009 along with just under NZ$1 billion of unguaranteed bank paper, and a number of local fund managers have told KangaNews that after a bumper year for bank issuance in 2008 – when over NZ$4.5 billion, all of it unguaranteed, was issued – their demand for the same names in unguaranteed format is limited.
"It would come as a surprise to me if there is a short-term revival in demand for unguaranteed bank paper – that is still pretty well sated," one institutional investor says. "That is not an issue of creditworthiness in the banking sector, but simply a case that there is only so long you can continue to pour money into the same four or five names."
• The September edition of KangaNews will feature in-depth comment and analysis on the New Zealand debt capital markets.
