NZX Announcement
30 June 2020

SHAREHOLDERS APPROVE CHANGE TO LGFA FOUNDATION POLICY COVENANT

The shareholders of the New Zealand Local Government Funding Agency Limited (LGFA) have today approved at a Special General Meeting, the changes to the foundation policy financial covenant set out in its foundation policies.

As advised to the NZX on 4 May 2020 the LGFA board proposed to amend the net debt / total revenue covenant that applies to local authority borrowers with a long-term credit rating of 'A' equivalent or higher. Any changes to the foundation policies require approval by LGFA shareholders.

Local authority borrowers with a long-term credit rating of 'A' equivalent or higher are now required to maintain their net debt / total revenue ratio

  • for the financial year ending 30 June 2020 no more than 250%;
  • for the financial years ending 30 June 2021 and 2022 no more than 300%; and
  • for each of the next four years financial years, a decrease of 5% until a limit of 280% will apply for and from the financial year ending 30 June 2026.

ENDS
Released on behalf of New Zealand Local Government Funding Agency Limited by Mark Butcher, Chief Executive.
Telephone +64 4 974 6744
Email mark.butcher@lgfa.co.nz
Website lgfa.co.nz