LGFA’s Chief Executive, Mr Phil Combes welcomes today’s tender results of LGFA’s inaugural bond Issue.
“This is an important milestone in the development of the LGFA’s funding role for the local authority sector” said Mr Combes. The result today was very pleasing in terms of relative yield, record over subscriptions and interest from a range of domestic and offshore investors. The strong result also has to be viewed in the context of the current funding pressures faced by all borrowers globally, as a result of the European Sovereign Debt Crisis. The tender results show that LGFA’s securities clearly sit in yield terms between the NZ Government and other highly rated issuers.
Mr Combes also believes that over time the LGFA’s margin to NZ Government securities will narrow given the initial success of today’s tender and future interest from investors that were not successful today or were unable to participate.
Mr Craig Stobo, Chairman of LGFA Board said “For our local authority stakeholders we have provided a new low cost source of funds with the absolute yields of the tender today being well within council budgets.
For investors the LGFA provides a new security that we hope over time will replicate the role of the semi-government bond market in Australia.”
Mr Combes expected the timing and details of the next tender to be announced within the next four weeks. A final decision will follow further consultation with councils, banks and investors.
Phil Combes
Chief Executive
T 04 462 6849