Rates Round Up

Kiwibank happy with TD Tuesday's uptake; Vector bond sale raises $150 mln; Govt may align PIE and personal taxes

Monday, 1 June 2009

by Paul McBeth

iwibank ‘very happy' with response term deposit offer
Kiwibank is "very happy" with the uptake of the special rate it offered on 100-day term deposits this week, despite Westpac and TSB moving into crowd it out.

Kiwibank's TD Tuesday achieved the desired uptake with a term deposit rate of 4.75% for 100 days, despite Westpac's attempt to trump it with 4.8% return on a 70-day term deposit and TSB matching the offer.

"The first mover gets the advantage" in situations like this, said spokesman Bruce Thompson. "We hyped it up a bit, and a lot of people were watching very closely."

Vector bond sale raises $150 million
Vector, the country's biggest distributer of gas and electricity, raised $150 million to bolster its finances this week after it completed its sale of five-year bonds.

The bonds, which mature on October 15 2014, pay an interest rate of 7.8% and have been given a credit rating of BBB+ by Standard & Poor's.

A number of companies have tapped the bond market to lift their balance sheets and pay down debt as the global economic downturn saps consumer demand for goods and services.

Govt may align PIE and personal tax rates
The government may align the lower bands of Portfolio Investment Entity, or PIE, and personal tax rates as it seeks to avoid penalising low income earnings from saving in managed funds, like the government-sponsored KiwiSaver.

While nothing concrete was announced in the budget, the Treasury said it was working towards aligning the structures in its economic and fiscal update.

The department expects a restructure would reduce government revenue by $20 million a year.

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