Bank of New Zealand Subordinated Bond Issue

13 June 2007

Bank of New Zealand Subordinated Bond Issue

This announcement relates to the offer by Bank of New Zealand of subordinated bonds under an Investment Statement dated 1 June 2007.

Bank of New Zealand today priced its first Subordinated Bond issue under its newly established Subordinated Debt Programme. Bank of New Zealand is rated AA and Aa2 by Standard and Poor’s and Moody’s, respectively, with the issue rated AA- and Aa3 to reflect the subordination.

The issue was upsized by NZ$ 50 million (or 16.66%), to NZ$ 350 million to accommodate the strong investor demand. A wide panoply of institutional and retail investors participated in the issue with retail investors taking 48% of the issue in the primary market.

The bonds were issued at a margin of 25 basis points over the 5 year swap mid-rate, with an issue yield of 8.42% p.a., payable semi-annually. The minimum subscription amount for the bonds is $10,000.

The bonds have a maturity date of 15 June 2017, but can be called by Bank of New Zealand on 15 June 2012. If the bonds are not called after 5 years, then the margin on the bonds steps up by 50 basis points.

The transaction was lead managed by Bank of New Zealand.

Application has been made to NZX for permission to list the bonds and all the requirements of NZX relating thereto that can be complied with on or before the date of this media release have been duly complied with. However, NZX accepts no responsibility for any statement in this media release.

ENDS

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