Proceeds of the offer will be used by KCFL to invest in regulatory capital instruments to be issued by Kiwibank, which will help Kiwibank meet its regulatory capital requirements under the Reserve Bank’s Basel III framework. If Kiwibank encounters severe financial difficulty or does not hold enough capital, the Kiwibank regulatory instruments may be converted into ordinary shares in Kiwibank or written off. If this happens, the returns on the notes may change or investors could lose their investment.
The notes have no fixed repayment date but may, subject to conditions, be repaid or purchased by a related company.
The interest rate will be set on May 1. Interest payments will be made quarterly, unless conditions are not met.
The indicative margin is 3.65% to 3.95% a year.
The notes are rated BB- by S&P, which reflects their ranking behind KCFL's other obligations, the discretionary interest payments and loss absorption features.
They are not guaranteed.
The offer is to open May 4 and close May 22.
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