Investor uncertainty about credit markets helped lift demand for Telecom Finance bonds, Forsyth Barr broker Ken Lister said yesterday.
Telecom had now completed its projected financing requirements for the year, of $400 million.
The telebonds were offered in three, five and seven-year maturities, with most investor interest shown in the five and seven-year issues.
Investor confidence had been knocked by repeated failures of finance companies, he said.
"Here's a security with an A rating. People are far more conscious of banks raising capital and Telecom is another 'name' in the market with a credit rating.
"I was not surprised by the demand. It's a flight to quality and another place with a credit rating for investors to put funds."
Telecom chief financial officer Russ Holden said the company was pleased with the strong demand for the telebond issue from the retail sector but noted interest had also been shown by institutional investors.
"It is encouraging the New Zealand debt market can still offer significant financing for well-rated corporates despite these uncertain times on global capital markets."
Proceeds from the capital raising would be used against the repayment of a $690 million debt maturity in December and for general corporate purposes.
The telebonds are unsecured, unsubordinated interest-bearing debt.
