Money at Work: Meridian Energy's Renewable Energy Notes
Money at Work looks at Meridian's Renewable Energy Notes, cutely called RENs.
Friday, February 6th 2009, 6:09PM
What is it called and what sort of savings product is it?
Meridian Energy's Renewable Energy Notes
Who is the company behind it?
Meridian Energy is the largest of three state-owned enterprises which generate energy for New Zealand. It has capacity to produce around 2438MW of power each year which is nearly a third of this country's requirements. Amongst its assets are eight hydro power stations and it has wind farms as well.
Who is the target market?
Low-risk investors with a green twinge.
What return does it offer?
The returns range from 5 per cent to 5.25 per cent depending on what term is selected.
When was it launched?
December 1, 2008.
What other products is it like or is it competing with?
This week there has been a flood of corporate bond offers coming to the market, seeking to raise up to $1.1 billion in total.
Is it long term, short term or medium term?
Meridian has three terms on offer, nine, 12 and 18 months.
What is the unique selling point?
This bond is a little unique as the money raised will be used to fund renewable energy projects.
How strong a stomach do you need for it?
The risk isn't that high, but then nor are the rates. While Meridian is an SOE the notes are not guaranteed by the government. Meridian has a BBB+ rating from Standard and Poor's.
What's the hitch?
Investors have very limited rights with these notes, plus there is no secondary market for investors wanting to sell notes before the maturity date.
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