Heritage Bank Retail Bonds offer raises $227.5 million

Heritage Bank announced today that it had raised $227.5 million from the successful completion of the public offer of Heritage Bank Retail Bonds, close to double the original amount sought.

Heritage Bank Retail Bonds are five-year, senior, unsecured bonds which will pay interest at a fixed rate of 7.25% on a quarterly basis. The bonds offer was launched on 17 May.

Heritage Bank’s Chairman Mr Brian Carter, said: “We are very pleased with the strong support for the offer. In aggregate we received approximately $480 million in bids, more than three and a half times the amount initially sought.

“As a result we upsized the amount issued to $227.5 million. The offer attracted widespread interest from new and existing investors and demonstrates investors’ ongoing support for Heritage Bank.”

Heritage CEO Mr John Minz said this transaction signified a continuation of Heritage’s commitment to providing retail investors with the right product and excellent value.

“We had extraordinary interest from investors across all channels,” Mr Minz said.

“We believe the positive response reflects the value that investors see in the offer, as well as the market confidence in Heritage Bank as an investment opportunity.”

“Heritage did a lot of work to understand investors’ needs and structured the product accordingly. This is the second listed bond Heritage has issued and both transactions have been a resounding success.

“I’m extremely pleased at the response to this offer, which is the first senior bonds issue of this type by a mutual bank in Australia. The success of the Heritage Bank Retail Bonds further highlights our ability to innovate in meeting our funding and capital requirements.”

As a result of the large number of applications received under the Member Offer and General Offer, it was not possible to allocate the full amount of Heritage Bank Retail Bonds to each applicant.

Valid applications under the Member Offer or General Offer that were received on or before the Closing Date of 5.00pm (Queensland time) Wednesday 13 June 2012 will receive a pro rata allocation of:

  • 78% of the number of Heritage Bank Retail Bonds applied for (in connection with applications made under the Member Offer); and
  • 28.3% of the number of Heritage Bank Retail Bonds applied for (in connection with applications made under the General Offer).

Allocations to Syndicate Brokers were determined pursuant to the Bookbuild conducted on 24 May 2012. Applicants under the Broker Firm Offer should confirm their allocation of Heritage Bank Retail Bonds with their Syndicate Broker. Successful Institutional Investors under the Institutional Offer have been advised of their allocation.

Holding Statements which set out the number of Heritage Bank Retail Bonds issued to each successful applicant are expected to be dispatched by Friday 22 June 2012. Any refunds are also expected to be dispatched by this date.

Member Offer applicants and General Offer applicants can obtain information about their allocation of Heritage Bank Retail Bonds by calling the Information Line on 1300 558 416.

The Heritage Bank Retail Bonds are expected to commence trading on a deferred settlement basis on ASX at 12.00pm (Sydney time) on 20 June 2012 under the code “HBSHB”. It is expected that trading on ASX will commence on a normal settlement basis on 25 June 2012.

* Home loan comparison rate based on a $150,000 loan over 25 years.  Fixed loan comparison rate applies only for loans with an LVR of 80% or less and a loan amount of $150,000 to $249,999.  WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Interest rates are on a per annum basis. Rates are correct as stated and subject to change without notice. Rates shown are for new loans and do not apply to switches or internal refinances.

Home Advantage Variable rates include discounts shown from the Standard Variable rate. Home Advantage Living Equity rates include discounts from the Living Equity rate. Discounts are based on total lending in the package. Discount Variable LVR rates are for new lending and include discounts from the Discount Variable Loan Rate.  Discounts are not available in conjunction with any other interest rate discount or special offer. All fixed rates are fixed for the period stated and revert to the variable rate applying at expiration of the fixed term. To approved applicants only. Conditions, criteria and fees apply.

Loan to Value Ratio (LVR) is the loan amount divided by the value of your security property (determined by Heritage Bank at assessment), multiplied by 100. Owner Occupied loans have a maximum LVR of 95%, Investment loans have a maximum LVR of 80% and Living Equity has a maximum LVR of 80%. Heritage is not accepting any new investment applications until further notice.

This advice has been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs.

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