Meridian’s bond issue won’t dent demand for high-grade corporate debt

The power generator and retailer's chief executive Tim Lusk told a Meridian profit briefing it will enter the retail bond market for the first time in the first three months next year, though the exact size of the Renewable Energy Bonds has yet to be finalised.

Still, demand for secure fixed securities that offer a decent yield is strong and the prospect of waiting until next year will not sit well with all investors, according to Direct Broking director David Speight.

"There are people with cash burning a hole in their pocket only earning 3 or 4% who won't want to wait until next year," Speight said. "There will undoubtedly be other issues before Meridian."

Demand for investment grade bonds with decent yields has pushed up prices since the credit crisis last year as companies looked towards retail investors to bolster their balance sheets.