The number and size of new debt issues coming to the local debt/capital markets has tailed-off somewhat in the second half of the year. New Zealand corporate balance sheets are arguably under-geared and there does not seem to be the confidence to expand into new capital projects on a debt funded basis. Thus lower debt issuance. M & A activity is dominated by Australian private equity firms buying up NZ companies. These transactions are leveraged at the holding company level above the operating company, but this debt funding is all sourced from banks. Recent debt issues to the wholesale and retail investor markets include:-

• South Canterbury Finance – re-jigged their existing perpetual bonds with a new $120 million perpetual preference share issue at 2.3% above the one-year swap rate.
• $40m of rated mortgage bonds (BBB Fitch) from Profertyfinance Group. Floating issue at 1.30% above 90-day BKBM.
• Unrated Infratil issuing a new perpetual “PIIB” - Perpetual Infratil Infrastructure Bond, at 1.5% above the one-year swap rate.
• Meat processor PPCS replacing their July 2007 senior bonds with a new 4-year issue at 3.00% above swap.
• BBI Networks (Powerco) issuing $150m of 6-year bonds at 1.05% above swap