BANK OF NEW ZEALAND QUOTATION DOCUMENT FOR MEDIUM TERM NOTES. 23 August 2016

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1 BANK OF NEW ZEALAND QUOTATION DOCUMENT FOR MEDIUM TERM NOTES 23 August 2016 Overview Bank of New Zealand issued the Medium Term Notes ("MTNs") referred to in this document on the Issue Date, as described in the appendix to this document. The MTNs have now been accepted for quotation by NZX and will be quoted on the NZX Debt Market from 29 August However, NZX accepts no responsibility for any statement in this document. NZX is a licensed market operator and the NZX Debt Market is a licensed market under the Financial Markets Conduct Act This notice is a "Profile" for the purposes of the NZX Listing Rules. Capitalised terms used but not otherwise defined in this document have the meaning given to them in the Deed Poll (defined below). Description of the MTNs This document relates to a series of MTNs issued by BNZ, the specific details of which are set out in the appendix. The MTNs referred to in this document are fixed term, interest bearing debt securities. As a holder of the MTNs, you are entitled to receive interest on scheduled Interest Payment Dates and to be repaid the Redemption Amount of the MTNs on the Maturity Date. You are not entitled to be repaid the Redemption Amount prior to the Maturity Date except in certain circumstances if an Event of Default occurs. The MTNs are unsecured and not guaranteed by the Crown or any other person. General information which is applicable to the MTNs is set out in the table below. More specific information in relation to the MTNs (including the Interest Rate, Interest Payment Dates and Maturity Date) is set out in the appendix. Issuer: Instrument: Credit ratings: Bank of New Zealand ("BNZ") NZ$ medium term unsecured unsubordinated notes issued pursuant to the note deed poll dated 14 November 2013 as amended by Amending Deed dated 4 April 2014 and as amended from time to time ("Deed Poll") and offered under final terms dated 13 June 2016 ("Final Terms"), an information memorandum dated 4 April 2014 ("Information Memorandum") and an investment statement dated 14 November 2013 ("Investment Statement"). A credit rating is an independent opinion of the capability and willingness of an entity to repay its debts (in other words, its creditworthiness). It is not a guarantee that the financial product being offered is a safe investment. A credit rating should be considered alongside all other relevant information when making an investment decision. The MTNs have been rated by Moody's and Standard & Poor's. 1 Moody's gives ratings from Aaa through to C. Standard & Poor's gives rating from AAA through to C, excluding ratings attached to entities in default. As at the date of this document, the MTNs have a credit rating of AA- (negative outlook) by Standard & Poor's and Aa3 by Moody's (negative outlook). 1 Moody's refers to Moody's Investor Services Pty Limited and Standard & Poor's refers to Standard & Poor's (Australia) Pty Limited.

2 The following table describes the credit rating grades available: Summary description of Standard & Poor's rating Capacity to make a timely payment Vulnerability to nonpayment Expected date of initial quotation: 29 August 2016 Extremely strong Very Strong Range of credit ratings for Standard & Poor's AAA AA (Credit rating for the MTNs AA- 2 ) Range of credit ratings for Moody's Aaa Aa (Credit rating for the MTNs Aa3 1 ) Strong A A Adequate BBB Baa Less More Currently Currently highly BB B CCC Ba B Caa CC to C Ca to C 3 A credit rating is not a recommendation by any rating organisation to buy, sell or hold MTNs and may be subject to revision or withdrawal at any time. More information on these ratings is contained in BNZ's latest full year disclosure statement (see "Documentation" below). 2 Denominations: Transfer restrictions: Registrar: $5,000 and in multiples of $1,000 thereafter As a Holder of MTNs, you may only transfer MTNs if the transfer is in respect of MTNs having an aggregate Redemption Amount that is an integral multiple of $1,000. However, BNZ will not register any transfer of MTNs if the transfer would result in the transferor or the transferee holding or continuing to hold MTNs with an aggregate Redemption Amount of less than $5,000. The Transfer restrictions have been approved by NZX under Listing Rule Computershare Investor Services Limited 2 Credit ratings from Standard & Poor's may be modified by the addition of "+" or "-" to show the relative standing within the "AA" to "B" categories. Moody's applies numerical modifiers 1, 2 and 3 to each of the "Aa" to "Caa" classifications to show the relative standing within those categories, with 1 indicating the higher end and 3 the lower end of the rating category. 3 If a rating of "C" is given by Moody's, the issuer is typically in default.

3 Ranking: The table below shows how the MTNs would rank upon a winding-up of BNZ. 3 Higher ranking than the MTNs Equal ranking with the MTNs Lower ranking than the MTNs 5 Examples Secured debt and creditors preferred by law Unsubordinated unsecured debt Term subordinated debt Perpetual subordinated unsecured debt Preference shares and other equally ranked instruments Ordinary shares Examples of obligations/securities Secured creditors such as money held with clearing systems and covered bond holders 4 Liabilities given preference by law including employee entitlements and taxes Deposit accounts, senior bonds, and trade and general creditors Subordinated unsecured notes issued to the public in 2015, subordinated loans made by National Australia Bank Limited and National Equities Limited None currently on issue to the public Perpetual preference shares issued in 2008 Ordinary shares of BNZ Principal risks: The principal risks which may affect your ability to recover the money paid for MTNs or to receive returns are: If you sell your MTNs before maturity, the price obtained for your MTNs may differ from the amount you paid to purchase them. This is in part because changes in the market interest rates can affect the market value of your MTNs. For instance, if market rates go up, the market value of MTNs may go down, and vice versa. The loss or gain of capital is a function of the effect of a change in underlying market interest rates on the value of your investment over which BNZ has no control. The price at which you are able to sell your MTNs may also be affected by a deterioration, whether real or perceived, in BNZ s creditworthiness (including a downgrade of its credit rating), or the lack of an established market or demand for the MTNs. The insolvency, receivership or statutory management of BNZ in circumstances where the assets of BNZ are insufficient to meet claims ranking ahead of, and equally with, your claim in respect of your MTNs. 4 Covered bonds are an unsecured claim on BNZ but are secured over certain assets which have been sold by BNZ to the BNZ Covered Bond Trust. Those assets do not qualify for derecognition so still appear in BNZ's financial statements but are not available to creditors of BNZ, including holders of the MTNs. 5 As a registered bank BNZ is required to maintain a minimum level of, and quality of, capital relative to its riskweighted assets. Information on the amount of qualifying capital that BNZ holds is contained in BNZ's most recent quarterly disclosure statement. You can obtain a copy of BNZ s latest disclosure statements free of charge at any store of BNZ or from bnz.co.nz/about-us/governance/financials.

4 More information about BNZ's business, financial position and risk management is set out in BNZ's disclosure statements. BNZ's latest disclosure statement is available at bnz.co.nz/aboutus/governance/financials. 4 Event of Default: If an Event of Default occurs and continues unremedied and you give notice of early repayment, then BNZ must immediately pay you the Redemption Amount of the MTNs together with accrued interest on those MTNs. In summary, the Events of Default include: non-payment of interest for 30 days or more or non-payment of principal for 7 days or more; a default by BNZ of its obligations under the MTNs which is not remedied within 30 days of notice being given to BNZ; where BNZ stops payment of its debts generally; and insolvency-type events affecting BNZ. Full details of the Events of Default are contained in the Deed Poll. Tax: Documentation: The return on your MTNs will be affected by taxes. If a law requires BNZ to deduct an amount in respect of taxes from a payment under a MTN, then BNZ will deduct the amount and pay it to the relevant authority. BNZ is not obliged to pay you any additional amounts by way of gross up or otherwise in relation to any such deduction. Under the Deed Poll, you indemnify BNZ and the Paying Agent in respect of any tax which BNZ or the Paying Agent becomes liable to pay on your behalf. BNZ may deduct any indemnity payment from future amounts payable. If you have any questions regarding the tax consequences of investing in the MTNs you should seek advice from a tax adviser. Information about BNZ is contained or referred to in BNZ s disclosure statements (which contain BNZ s financial statements). You can obtain a copy of BNZ s latest disclosure statement free of charge at any store of BNZ or from bnz.co.nz/about-us/governance/financials. Additional information about the MTNs is contained in the Deed Poll, the Final Terms (which sets out specific commercial terms and conditions applicable to the MTNs), the Information Memorandum (which contains information on BNZ's domestic debt issuance programme) and the Investment Statement (which sets out key information designed to assist a prudent but non-expert person in deciding whether or not they should have subscribed for the MTNs when they were issued). The information in the Final Terms, the Information Memorandum and the Investment Statement was correct as at the Issue Date. You may obtain a copy of the Deed Poll, the Final Terms, the Information Memorandum and the Investment Statement, free of charge, on request, during normal business hours from: BNZ Treasurer Level 3 80 Queen Street Private Bag Auckland 1142 Telephone: (09) Fax: (09) The Investment Statement is also available at bnz.co.nz/assets/about-us/terms-conditions/pdfs/investmentstatement-debt-issuance-programme.pdf. In addition to the above information, if you purchase MTNs you will receive a holding statement from the Registrar setting out various information in relation to your holding of MTNs within 5 Business Days after the date of registration of the relevant transfer.

5 Trading of MTNs on NZX Debt Market: NZX waiver: How to make a complaint: To be eligible to trade the MTNs on the NZX Debt Market, you must have an account with a NZX Primary Market Participant, a Common Shareholder Number ("CSN") and an Authorisation Code ("FIN"). If you do not have an account with a financial adviser you should be aware that opening an account can take a number of days depending on the NZX Primary Market Participant's new client procedures. You will receive your Holding Statement from the Registry within 5 Business Days of the initial date of quotation, which will also include your CSN. You will also be able to obtain your CSN by calling (09) If you do not have a FIN, it is expected that you will be sent one as a separate communication by the Registry. If you have a financial adviser and have not received a FIN by the date you want to trade your MTNs, your financial adviser can arrange to obtain your FIN from the Registry. Your financial adviser may be charged for requesting your FIN from the Registry and may pass this cost on to you. NZX has provided BNZ with a waiver from the following NZX Listing Rules: NZX Listing Rule 3.2.1(a), which means that BNZ is able to rely on the exclusion for registered banks from the requirement to have a trust deed and a trustee in respect of the MTNs NZX Listing Rules 10.3 and 10.4, which means that BNZ is able to provide its quarterly disclosure statements as a registered bank instead of complying with Listing Rules 10.3 and 10.4 If you have any problems or concerns about the MTNs, please contact BNZ outlining your problems or concerns using the contact details set out above in "Documentation" and BNZ will endeavour to resolve the issues through its internal dispute resolution procedures. You may request a copy of these procedures by writing to BNZ. If BNZ has not been able to resolve the complaint, you may be able to take your complaint to the Banking Ombudsman Scheme, which is an approved dispute resolution scheme. The scheme will not charge a fee to any complainant to investigate or resolve a complaint and can be contacted at Freepost , PO Box 25327, Featherston Street, Wellington 6146, by phone or by help@bankomb.org.nz. 5

6 APPENDIX 6 NZ$250,000,000 7 Year Fixed Rate MTNs Maturing 15 June 2023 Series Amount: ISIN: NZ$250,000,000 NZBNZDT387C9 Issue Date: 15 June 2016 Maturity Date: 15 June 2023 Redemption Amount: Interest Rate: Credit Rating: Interest Payment Dates: Business Day Convention Interest Payments: NZX Debt Market ticker code NZClear Code: $1.00 per MTN 4.102% per annum As at date of this document: AA-(negative outlook) S&P; Aa3 (negative outlook) Moody's 15 June and 15 December in each year to and including the Maturity Date. The first Interest Payment Date following the expected date of initial quotation will be 15 December Auckland and Wellington, Modified Following Semi-annually in arrear BNZ110 BNZW40