Hon Dr Michael Cullen
Minister of Finance

15 February 2007 Media Statement

First Infrastructure Bond tender a roaring success

The first tender of Infrastructure Bonds has been successfully completed and this will help accelerate the biggest road-building programme this country has seen, Finance Minister Michael Cullen said today.

Treasury's Debt Management Office today completed a $100 million issue of 2017 bonds, of which $50 million will be used to help fund a multi-billion investment in land transport over the next five years.

The 2017 issue was eight times oversubscribed. One successful bidder purchased all $100 million of the bonds at a yield of 5.94 per cent, slightly below the market yield at the time of the tender.

"I am pleased the first issue of Infrastructure Bonds has been completed as this underlines the government's commitment to ensure New Zealanders get the world class transport network they deserve," said Dr Cullen.

Budget 2006 provided for up to $1 billion of bonds to be issued over the next five years to accelerate land transport improvements.

"One of the great features of Infrastructure Bonds is their transparency. New Zealanders will be able to readily see how borrowed funds are being used for key State Highway projects.

"We are investing $13.4 billion over the next five years, $300 million more than we will receive by way of petrol excise duties, road user charges and motor vehicle registration fees.

"The Labour-led government regards transport investment as a key part of its strategy to transform the economy," Dr Cullen concluded.

ENDS

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