"We are very excited and pleased, particularly given the activity that went on in the finance industry recently. I am not just talking about finance companies. Equity markets were also in decline in the past four weeks the issue was open," Marac managing director said in an interview.
"We could not have chosen a worse four weeks in the last year to promote the bonds."
Closing oversubscribed was a "huge endorsement" of the South Island-based company which was owned by listed Pyne Gould Corporation, he said.
Asked why investors seemed so keen to put their money in Marac, given the turmoil in the finance company industry, Mr Jolliffe said bond market investors were more sophisticated and understood the bond markets better than people who just looked for bank term deposits.
The 10.5% return over five years was seen as a suitable risk-reward rate.
The investors understood that Marac was a conservative company, unlike some others in the industry.
Marac's strategy was easy to understand. It lent money to thousands of small New Zealand businesses to buy assets and to consumers for high-value assets such as new or near-new1 used cars. Marac had some property exposure but it was at the quality end of the market.
"We have a clean balance sheet, no related parties transactions and we declare things like arrears. Marac has an investment grade rating, something only one or two others had in the rest of the market."
Defining the "typical" Marac investor was difficult, Mr Jolliffe said.
The bond issue was taken up by many existing debenture holders mainly in the 55 and over age group. There were some new clients and some institutions in the issue.
Proceeds raised by the bonds would bring liquidity reserves to $250 million.
The completion of the issue broadened Marac's funding base which consisted of facilities from five major banks, a retail debenture programme and a securitisation programme.
Forsyth Barr and ANZ-National Bank were the underwriters and Forsyth Barr was the organising broker.
The bonds had been rated BBB- (stable) by international rating agency Standard & Poor's.
