Multi-billion dollar bond listing a first for local government

Councils and New Zealand investors are big winners from the first multi-billion dollar local government bond listing, Ministers Paula Bennett and Paul Goldsmith say.

The Local Government Funding Agency (LGFA) has today listed $5.56 billion of its bonds on the NZX Debt Market. Established in 2011, the LGFA raises debt on behalf of local authorities on terms more favourable to them than if councils raised the debt individually.

“This is a significant milestone for the LGFA, as New Zealand’s second largest issuer of New Zealand Dollar bonds,” Local Government Minister Paula Bennett says.

“Not only does it extend the investor base and provide councils with better borrowing rates, but it gives New Zealanders an AA+ rated investment opportunity.

“The Government set up the LGFA following the Global Financial Crisis to assist local government fund things like infrastructure projects that support regional economic growth.”

Currently $13.5 billion of bonds are listed on the NZX Debt Market, and the addition of LGFA will grow this by 41 per cent.

Minister of Commerce and Consumer Affairs Hon Paul Goldsmith says the listing is a positive development.

“The LGFA is playing an increasingly important role in our capital markets.

“This is a significant bond listing which gives a major boost to the NZX Debt Market. It also gives more retail investors the opportunity to invest in quality bonds to help to fund local government activities.”

“The listing highlights the focus this government has on expanding capital markets and driving improved council performance.

The Crown holds a 20 per cent shareholding stake in the LGFA through the Ministers of Finance and Local Government.