MEDIA RELEASE

LGFA’S great start good news for ratepayers, says LGNZ

16 FEBRUARY 2012

Local Government New Zealand (LGNZ) says the success of yesterday’s Local Government Funding Agency’s (LGFA) bonds issue is good news for many ratepayers.

“The 18 councils that own 80 percent of the Agency will be able to borrow money at cheaper rates, which means there will be less pressure on council rates,” said LGNZ President, Lawrence Yule.

The LGFA bonds issued yesterday had an overbid rate of 4.4 – $1.32 billion was bid on $300 million worth of bonds.

“This huge financial buy in to the future of local government is a vote of confidence in our sector, “Mr Yule said.

“Also, the positive response from investors highlights how local government plays a pivotal role in supporting the Government’s economic growth agenda.”

The LGFA, which came into being on 1 December, is also 20 per cent owned by the Government and the cheaper financing is possible because, among other reasons, offshore borrowing for use by councils has been allowed for the first time.

ENDS

Notes to editors

1. The LGFA’s primary purpose is to provide more efficient funding costs and diversified funding sources (including foreign currency) for New Zealand local authorities

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