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.

* Based on a $150,000 loan over 25 years. 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.