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Kiwi Capital Funding Limited has made an Investment Statement and Offer Flyer available for an offer of capital notes ("KCFL Capital Notes") of up to $100m. KCFL is a related company of Kiwibank Limited ("Kiwibank").

KCFL will use the proceeds of the offer to invest in subordinated convertible bonds ("Kiwibank Bonds") issued by Kiwibank. Kiwibank will use the proceeds of the Kiwibank Bonds issued to KCFL to help meet its regulatory capital requirements. The Kiwibank Bonds held by KCFL are expected to count as Tier 2 Capital for Kiwibank under the Reserve Bank of New Zealand prudential standards.
If Kiwibank encounters financial difficulty severe enough to result in a Non-Viability Trigger Event then the Kiwibank Bonds held by KCFL could be converted into ordinary shares in Kiwibank or written off.

Kiwibank is rated A+ (negative outlook) by Standard & Poors. The KCFL Capital Notes are rated BB+ by Standard & Poors.

KCFL Capital Notes could be repaid early following a regulatory or tax event and on the Optional Repayment Date, subject to Reserve Bank of New Zealand consent.

Key Details

• Description: KCFL Capital Notes are unsecured, subordinated, cumulative, loss absorbing debt securities issued by KCFL.
• Credit Rating: BB+ by Standard & Poors.
• Issue amount: Up to NZ$100 million.
• Maturity Date: 15 July 2024.
• Optional Repayment Date: 15 July 2019 and on any subsequent interest payment date.
• Reset Date: 15 July 2019
• Interest Rate: The interest rate until the Reset Date will be the sum of the margin and the 5 year swap rate. The interest rate and the margin will be set following a book build process on 14 May 2014.
• Indicative Margin: The indicative margin range for the book build has been set at 2.15% to 2.35% p.a. As a guide only, if set today (5 May 2014), the indicative margin range would result in an interest rate until the Reset Date of 6.66% to 6.86% p.a. Please note the actual interest rate could be set within, higher or lower than this indicative range.
• Interest Payments: Interest is scheduled to be paid semi-annually on 15 July and 15 January of each year.
• Minimum application: Minimum application of NZ$5,000 and in multiples of NZ$1,000 thereafter
• NZX Debt Market quotation: It is expected that the KCFL Capital Notes will be quoted under code KCF010 on NZDX.

Expected Key Dates

• Offer Documents Available: 5 May 2014
• FMA Consideration Period Begins: 5 May 2014
• Bookbuild Date: 14 May 2014
• Announcement of Margin and Interest Rate: 14 May 2014
• Opening Date for the Offer: 15 May 2014
• Closing Date for the Offer: 5.00 pm on 3 June 2014
• Listing Date: 9 June 2014