Rates Round Up: July 9
Westpac’s big bond rush; Hubbard investors told to repay; Pyne Gould sells Heartland shares
Monday, 9 July 2012
Westpac has raised another $620 million from two local bond issues, bringing its total raised for the year to more than $1.3 billion.
The bank had been seeking to raise up to $900 million in its latest offer of five-year floating rate notes (maximum $499 million) and seven-year medium term notes (maximum $500 million), which opened last Tuesday and closed on Thursday.
It raised $385 million from the five-year issue, which will be priced at 1.85% over the 90 day bank bill rate, which is currently sitting at about 2.7%.
Westpac raised $235 million from the seven-year bonds, which were priced at 5.61%, 2.05% about the seven-year swap rate of 3.56%.
In March Westpac raised $750 million through a domestic note issue, of which $600 million is paying a floating rate and $150 million fixed.
Hubbard investors told to repay
Fifty investors in an investment vehicle formerly run by the late Allan Hubbard will have to pay back a combined total of more than $3 million, statutory managers say.
This comes after a High Court judgment by Justice Lester Chisholm on how assets in the failed fund should be distributed to investors.
The new method of distribution will see the cash HMF investors had in the fund paid back first before any returns on investment.
It will ignore statements showing returns and capital growth that Allan Hubbard provided to investors on March 31, 2010.
As a result, some investors will have to give back some of the money already paid out to them, the statutory managers from Grant Thornton said.
However, they said there could be further legal action over the distribution of the fund, which would further delay payouts.
Pyne Gould sells Heartland shares
Pyne Gould Corporation, which is under investigation by the FMA over related-party transactions, has sold down its stakes in Heartland and PGG Wrightson.
In a substantial shareholder announcement to the NZX on Friday, PGC said that its subsidiary Torchlight Securities, which holds its shares in both companies, had sold 7.5 million shares in Heartland for $3.5 million (50c per share).
The sale reduced PGC's stake in Heartland from 9.8% (38 million shares) to 7.8% (30.5 million), its remaining shares worth just over $15 million based on the sale price.
PGC also announced on Friday that it had sold 40 million shares in PGG Wrightson for $11.6 million (29c per share).
Its remaining stake is 13 million shares (1.7%), worth $3.8 million based on the transaction.
The sell-downs followed news the FMA is investigating $25 million of loans made by PGC subsidiary Perpetual to the Torchlight Fund.
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