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Kiwibank has announced the issue of unsecured, perpetual, subordinated Capital Notes.

Perpetual: No fixed maturity date. The Capital Notes will remain on issue indefinitely unless repaid by KCFL or purchased by KGHL under the Scheduled Call, or written off.

Non-cumulative: Interest payments are subject to Kiwibank’s absolute discretion. If an interest payment is not paid for any reason, it will never be paid.

Security: The Perpetual Capital Notes are not guaranteed by Kiwibank, the Government or any other person. The Perpetual Capital Notes are unsecured.

Ranking: The Perpetual Capital Notes and the KGHL Perpetual Bonds held by KCFL are both deeply subordinated, including term subordinated debt.

Interest Rate: The Interest Rate for the first five years until May 2020 and the Margin will be set following a bookbuild. The Interest Rate will reset on each Reset Date to the then five year Swap Rate plus the Margin. Currently the indicative margin rate is between 365bps and 395bps. At current market swap rates this equates to a quarterly interest rate of 7.23% to 7.53% (on an annual equivalent basis 7.43% to 7.74%).

Reset Dates: May 2020 and every 5 years thereafter

Interest Payments: Interest on your Notes is scheduled to be paid quarterly in arrears on each

Interest Payment Date. Payments are discretionary and non-cumulative.

Listed: It is expected that the Notes will be listed on the NZDX (KCFHA).

Credit Rating: Kiwibank is rated A+ (negative outlook) by Standard & Poor’s. The Perpetual Capital Notes are rated BB-.

Investment Risks: A description of the key risks that may affect your returns and repayment of your investment in Perpetual Capital Notes is set out in Section 5.6 of the investment statement under the heading "What are my risks?" You should read that section in full before deciding to invest in Perpetual Capital Notes.

Issue Size: Up to NZ$150 million.

Early Bird Interest: Interest will accrue at 4.50% from the date from when monies are banked until (but not including) the Issue Date.

Denominations: Minimum of NZ$5,000 and in multiples of NZ$1,000 thereafter.


Important Dates

Closing Date: 22nd May 2015
Rate Set Date: 1st May 2015
Issue Date: 27th May 2015
Opening Date: 4th May 2015
Expected Listing Date: 28th May 2015