Kiwi Capital Funding Limited (KCFL) has today announced an offer of up to $100 million of unsecured subordinated Capital Notes to the New Zealand public. Proceeds of the offer of Capital Notes will be used to invest in convertible subordinated bonds to be issued by Kiwibank (a related company of KCFL), which will help Kiwibank meet its regulatory capital requirements under the Reserve Bank’s Basel III framework.

The Capital Notes have a maturity date of 15 July 2024 but may be called, if certain conditions are met, by KCFL from 15 July 2019 and earlier for tax or regulatory reasons. The Capital Notes have a credit rating of BB+ from Standard & Poor’s, reflecting their subordination and loss absorption features.

Interest is scheduled to be paid semi-annually on the Capital Notes.* The Margin and interest rate for the first five years until 15 July 2019 will be set following a bookbuild on Wednesday 14 May 2014 and announced on or before the Opening Date.

The Offer is expected to open on Thursday 15 May 2014 and close on Tuesday 3 June 2014 at 5pm. Interested investors should contact one of the Joint Lead Managers to the offer (listed below) or their usual financial adviser to request a copy of KCFL’s Investment Statement for the Capital Notes.

• Deutsche Craigs Limited 0800 226 263
• Forsyth Barr Limited 0800 367 227

Enquiries:

Bruce Thompson
Communications Manager
(04) 460 6831

All applicants will need to complete the application form that accompanies the Investment Statement. Applications will not be accepted until the opening date for the offer. The minimum holding for the Capital Notes is 5,000 Capital Notes and applications must be for a minimum of $5,000 and in multiples of $1,000 thereafter. You should read the whole of the Investment Statement before deciding whether to apply for Capital Notes.

Application has been made to NZX Limited (NZX) for permission to quote the Capital Notes on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the date of this announcement have been duly complied with. However, NZX accepts no responsibility for any statement in this announcement. The NZX Debt Market is a registered market operated by NZX which is a registered exchange, regulated under the Securities Markets Act 1988.

*The returns on the Capital Notes will be derived from the performance of the Kiwibank Bonds issued to KCFL by Kiwibank and may change if Kiwibank experiences severe financial difficulty. Additional information about Kiwibank is contained or referred to in Kiwibank’s latest interim and full year Disclosure Statements, available free of charge at www.kiwibank.co.nz/about-us/legal-docs or any branch of Kiwibank. The Capital Notes are not guaranteed by Kiwibank or New Zealand Post or any other person.