KiwiBank - Unsecured Subordinated Notes

[GTM 3442]

Issuer
Kiwibank Limited

Description
Unsecured Subordinated Notes (Notes)

Size
Up to $200 million sought

Ranking
In a liquidation of Kiwibank the Notes will rank behind depositors and other unsubordinated creditors
of Kiwibank, but ahead of Kiwibank's shareholders (including holders of perpetual preference shares)

Term
10 years, ending on the Maturity Date (12 May 2033) if not repaid earlier

Interest rate
The interest rate for the first five years will be a fixed rate equal to the sum of the Swap Rate on the
Rate Set Date plus the Margin. It will then be reset to be a fixed rate equal to the Swap Rate on the
Rate Reset Date plus the same Margin. The interest rate will not be less than 0% per annum.
I think it will probably be around 6.25%

Margin
Set on the Rate Set Date, announced by Kiwibank and will not change

Interest payments
Interest payments are scheduled to be paid quarterly in arrear and are subject to Kiwibank satisfying
the solvency condition. If interest is not paid on a Scheduled Interest Payment Date it will remain
owing and will itself bear interest.

Early repayment
Kiwibank has the option to repay on 12 May 2028 or on any Scheduled Interest Payment Date after
that date¹. Holders have no right to require the Notes be repaid early.

No guarantee
The Notes are not guaranteed by any member of the Kiwibank Banking Group, the Government or by
any other person

Credit Rating
Moody's Baa2
S&P BBB

Looking at 6.25% for 5 years with a BBB credit rating - what does this tell us about interest rates going forward?

[Nor]

The margin is an important number because if it's high the reset rate will be good even if the swap rate has gone down.

[Recaster]

Negative real interest rate, subordinated, weaker player. Wouldn't touch it.