Westpac second to use NZ guarantee

Westpac New Zealand became the second bank to issue under a New Zealand government guarantee in that market, last week. Westpac raised NZ$350 million for five years at 60 basis points over swap.

Bank of New Zealand was the first to issue under a government guarantee when it raised NZ$180 million for three years in February, at 80 bps over swap. The bank added NZ$105 million in March at the same spread but added a further NZ$415 million to the line two weeks ago at a spread of 60 bps over swap.

BNZ, Westpac and ANZ National have all issued offshore under a New Zealand government guarantee.

Downer EDI Works listed its NZ$150 million of Works Bonds on the NZDX on Wednesday. The three-year bonds will pay a coupon of 9.65 per cent or 500 bps over swap. Downer EDI is rated 'BBB-' by Fitch Ratings.

New Zealand's Debt Management Office offered four tranches of bonds on Wednesday to raise a total of NZ$350 million. Oversubscriptions averaged just under 2.3 times across the offering.

NZDMO sold NZ$50 million of November 2011 bonds, NZ$150 million of April 2013 bonds, NZ$100 million of April 2015 bonds and NZ$50 million of May 2021 bonds. Weighted average yields came in at 3.79 per cent, 4.77 per cent, 5.28 per cent and 6.21 per cent, respectively.