New Zealand Local Government Funding Agency
New Zealand Local Government Funding Agency (LGFA) undertook its first-ever syndicated transaction on 12 March. The deal represents a change in strategy for the borrower, which deal sources say allows it better to engage domestic and offshore investors seeking larger allocations – an outcome that was evident in the record volume achieved.
New Zealand Local Government Funding Agency is confident domestic market conditions are improving, supported by an expanded central bank asset-purchase programme. The issuer says its latest transaction is an encouraging sign the market will have capacity for increased supply from New Zealand’s semi-government borrowers.
On 8 April, New Zealand Local Government Funding Agency (LGFA) (AA+/AA+) launched an indicative NZ$300 million (US$178.9 million), six-year, syndicated deal to institutional and New Zealand retail investors. The issuer received bids in excess of NZ$600 million at the indicative margin range of 78-83 basis points over swap. The margin has now been revised to 78-80 basis points area, with pricing expected on 9 April.
The Reserve Bank of New Zealand (RBNZ) now says it will expand its large-scale asset purchase (LSAP) programme to include NZ$3 billion (US$1.8 billion) of New Zealand Local Government Funding Agency (LGFA) debt. The 7 March announcement comes just a day after the reserve bank said it would make “small scale” purchases of LGFA bonds alongside rather than as part of the LSAP.
On 1 April, New Zealand Local Government Funding Agency (LGFA) (AA+/AA+) revealed it is considering a syndicated bond deal maturing in April 2026. An investor conference call will be held on 2 April. BNZ is arranger for the transaction and joint lead manager alongside ANZ, Commonwealth Bank and Westpac Banking Corporation New Zealand Branch.
HIGH-GRADE ISSUERS YEARBOOK 2020
The ultimate guide to Australian and New Zealand government-sector borrowers.