Rates round-up: December 17
Auckland Council revives bond issue; UDC profit up 31%; SFO loses in Capital + Merchant judgment
Monday, December 17th 2012, 6:00AM
by Niko Kloeten
Auckland Council has closed its retail bond offer after successfully raising $125 million in an issue of six-year secured, unsubordinated retail bonds.
The interest rate for the bonds has been set at 4.41% per year, including a base rate of 3.36% from the six-year swap rate, plus a 1.05% margin.
The bonds have an AA credit rating from Standard & Poor's and an Aa2 rating from Moody's.
“We are very pleased with the outcome of the bond issue and the continued support from investors in Auckland Council,” said Auckland Council Treasurer Mark Butcher.
It is expected the bonds will be quoted on the NZX Debt Market from Wednesday.
The bond issue was originally due to take place in October but was put on hold while the council assessed the impact on its books of a court ruling on leaky building liability.
UDC profit up
Finance company UDC has recorded a $37.95 million profit after tax in the year to September, up $9 million (31%) from $28.9 million last year and its biggest profit since 2004.
UDC also paid its owner ANZ a $20 million dividend this year after paying no dividend last year.
Its financial statements show a slight shrinking of its loan book in the second half of the year with gross loans falling $5 million to $2.316 billion and total net loans dropping $2 million to $2.014 billion.
UDC has also increased its annual provision for credit impairment by $1.14 million, (23%), to $6 million.
Annual net interest income increased by $11.9 million (15%) to $88.7 million and total operating income also increased 15% to $89.4 million while operating expenses fell 0.7% to $30.95 million.
SFO loses in Capital + Merchant judgment
The Serious Fraud Office has failed in its bid to get a High Court judge to revisit his judgment clearing Capital + Merchant Finance directors Wayne Douglas and Neal Nicholls over $14.4 million of loans.
The two men are already in jail after being convicted of separate offences along with former chief executive Owen Tallentire.
The SFO is challenging Justice Edwin Wylie’s not guilty verdict on the trial of Douglas and Nicholls relating to what were known as the “hub” transactions.
It wanted him to revisit three questions of law relating to his judgment in the hope of using it as evidence in its Court of Appeal bid to overturn the rulings, but Justice Wylie declined.
"I simply concluded that on the materials before me, the Crown had failed to prove its case beyond reasonable doubt," he said in a judgment. "It is difficult to see how this finding could materially impact on other prosecutions."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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