Corporate debt is issued in a numbe

Corporate debt is issued in a number of different ways, principally by dealer panel (typically associated with a fixed-rate re-offer), and through tender and tap issues. Under New Zealand securities law, there are two main types of issuance: wholesale and retail.
A wholesale issue does not require the issuer to produce a prospectus, but can only be sold to professional and habitual investors. In New Zealand, there are less than a dozen major fund management companies, but a couple of hundred smaller investment pools. Wholesale issues are targeted at both these groups and, typically, will have a minimum purchase amount of NZD 100,000.
A retail issue must be sold under a prospectus, and can be sold to all members of the public (including wholesale investors). The minimum purchase amount can be as little as NZD 1,000.
Anecdotal evidence suggests that 99.9% of issuance is done by dealer panel, particularly when issue size is greater than NZD 50 million. Dealer panels are usually comprised of a small number of market participants appointed by the issuer. Panel members have exclusive distribution rights for the primary issue, as well as facilities for borrowing stock and relevant market information. Most deals bigger than NZD 50 million have a “co-lead manager”, though panels do not usually have more than three
members.3 The trend is for these panels to do a road show, conducting one-to-one meetings with client representatives, issue managers and “A-list” investors. A-list investors are often divided between
the lead and co-managers to avoid over-marketing the debt. In most cases, issuers pay performance- based fees to panel members to reflect support of primary issues, the promotion of these securities in the secondary market, and the provision of economic and debt management advice.
The other two methods of issuance, tap and tender, have been recently introduced in New Zealand. NZ Telecom has issued some tap debt, and Auckland City Council has issued via tenders. Tap issues are less liquid than others, and, consequently, trade at a premium. Smaller borrowers, such as GMAC and Primus, seem to prefer tap issues, as these are more easily adapted to prevailing business conditions and borrowing requirements.