Bond offers look likely to become increasingly popular ways of raising money, with three offers in the news already this week.
On Monday, Fletcher Building became the first in what brokers expected to be a long line of companies coming to the market to raise capital.
The company is making a public offer of $100 million of capital notes with the ability to accept $100 million of oversubscriptions.
The interest rate for the five-year notes will be 9%, a reflection that Fletcher Building is not part of the retail deposit guarantee scheme.
Proceeds will be used to repay debt.
Yesterday, South Canterbury Finance Ltd said it was considering selling up to $100 million of secured bonds maturing on October 8, 2010.
The bonds would pay 8% a year.
Forsyth Barr was lead manager.
The sale size was $75 million, with an ability to sell another $25 million in oversubscriptions.
South Canterbury Finance has a guarantee under the retail deposit guarantee scheme and can pay a lower rate as investors believe their money will be backed by the government guarantee.
The maturity of the bonds can be extended for 12 months if the deposit guarantee scheme is extended.
The terms of the offer will be set out in the prospectus and investment statement due around December 2.
Genesis Energy also announced a bond offer yesterday.
It said it would offer up to $150 million of senior bonds, plus oversubscriptions of up to $75 million, to New Zealand investors.
The offer would open on Wednesday and close on December 19.
Chairman Brian Corban said proceeds would be used for general corporate purposes, including the repayment of debt.
No rate was revealed yesterday but Mr Corban said it would be competitive for the two tranches.
It is understood the rate will be around 7% for the shorter-dated bonds and 8% for the longer term.
The market for debt has changed and with investors looking for good quality bonds, Genesis might find it cheaper to go to the public than seek bank funding.
Mr Corban said the bond issue provided New Zealanders with an opportunity to invest in a government-owned business that played a significant role in the New Zealand energy sector.
"While Genesis Energy is government-owned, potential investors should note that the Crown does not guarantee the bonds or any of the other obligations of Genesis Energy."
Genesis had activities in electricity generation, energy retailing and fuel development.
Rating agency Standard and Poor's last night rated the Genesis bonds at BBB+.
