Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

BUDGET 2012: DMO flags inflation-indexed bond issues

BUDGET 2012: DMO flags inflation-indexed bond issues in coming two years

By Paul McBeth

May 24 (BusinessDesk) - The New Zealand Debt Management Office will sell as much as $4 billion of inflation-indexed bonds in the next two financial years.

The government's debt issuer has been looking at resuming inflation-linked bond sales for the past couple of years, and will auction up to $2 billion in each of its 2013 and 2014 bond programmes.

The DMO increased its 2012 programme by $1.5 billion to $15 billion as it seeks to raise $45.5 billion of new debt over the next four years. That's $3 billion lower than was flagged in the pre-election fiscal and economic update in November. Over the next four years, the DMO expects to raise $14.9 billion in net borrowing.

"The increase in the 2011/12 bond programme will provide operational flexibility to issue additional bonds should there be an increase in demand prior to the end of the fiscal year," the DMO said. "Any such additional issuance, together with the increase in the 2012/13 bond programme, will be used to reduce Treasury bill outstandings from $9 billion to $5 billion."

In March, the DMO fell behind the run-rate required to meet its $13 billion annual target.

The DMO will see a $500 million reduction in net borrowing in the 2013 March year and $3 billion in 2015 as maturities outpace the volume of new sales.

The government expects net debt to peak at 28.7 percent of gross domestic product in 2013/14, and Finance Minister Bill English said the spending decisions it has made have caused a "lasting and permanent impact" on debt.

The low interest rate environment hasn't encouraged the government to ramp up its borrowing programme.

"The fall in bond rates has been unprecedented," English said. "We're not considering taking on more debt just because it's cheaper."

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>

ALSO:

Price Of Cheese: Fonterra CEO Goes Early After Milk Price Trimmed

Aug. 15 (BusinessDesk) - Fonterra Cooperative Group chief executive Theo Spierings is leaving the role early after the world's biggest dairy exporter lowered its farmgate payout and trimmed its dividend to retain cash. More>>

ALSO:

9.2 Percent: Gender Pay Gap Second-Smallest On Record

This is the second-smallest gap since the series began 20 years ago. In comparison, the gender pay gap was 9.1 percent in 2012 (the lowest on record) and 9.4 percent last year. More>>

ALSO:

Forest & Bird: Report Find Council Failures On Effluent

The report exposes significant inconsistencies and gaps in how regional councils are enforcing the rules around dairy effluent management. More>>

ALSO:

Mana In Mahi: Helping Young New Zealanders Into Work

Thousands of young people will be given the chance to gain valuable qualifications and meaningful work under the Mana in Mahi – Strength in Work scheme launched by Prime Minister Jacinda Ardern today. More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down. ... More>>