BUTCHER Breadth of issuance– more issuers – and longer term being available. The New Zealand Local Government Funding Agency has bonds on issue with a longest tenor of 15 years, but retail-investor interest drops away from three years onwards.

Looking forward three or four years, it would great to have 5-7 new issuers active and to see the bond index extended to more like five years from the current 3.5 years.

I also think it would be good if the interest-rate and credit cycles turn and interest rates rise. It would make the asset class more appealing to retail investors. At the moment it’s hard to envisage a flood of retail money into the product at current levels.

MARTIN As well as funding the Crown at the lowest possible cost and with acceptable risk, we believe we also play a role in developing New Zealand capital markets through our activities. Equally, we could see some benefits coming the other way if we had a broader range of product and these were on the radar of global investors. This could only be supportive of New Zealand government bonds.

MCLAUGHLIN The success of the residential mortgage obligation (RMO) process will mean more issuance in this market. A measure of success will be seeing second-tier banks issuing soon after the first-tier banks. This development would of itself mean a bigger and broader debt capital market in New Zealand.

HYDE-SMITH I agree with Fiona McLaughlin’s point and think structured product will be very useful for this market. More broadly, the key measure of success will be greater issuance to fund infrastructure needs – beyond merely the high-grade space.

FAVILLE For me, a simple measure of success would be giving as many reasons as possible for the investors managing New Zealand’s strongly growing pool of savings to allocate onshore rather than effectively being forced to look offshore for diversification and tenor.

The next-order effect would be that a local market with more breadth and depth would attract additional investment from offshore.

DIREEN We keep coming back to it, but I agree that broadening and also deepening the range of issuers is key to increasing the appeal of the New Zealand market. The government’s commitment to maintaining issuance at a minimum 20 per cent of GDP helps in this respect by providing critical mass from which other issuers can emerge and evolve.

MCLEISH We are focused on what we can do to be better. In this context, it means working with arrangers and borrowers who are looking for solutions. It doesn’t have to mean the development of a new high-grade asset class – whether it be the RMO or senior-secured infrastructure funding.

Every big market started with its very first transaction and I’d suggest the format adopted in many of those firsts was not the blueprint for every transaction thereafter.

We are interested in being part of the initial discussions. My sense is that although there is now a relatively large pool of capital in New Zealand there is also a relatively restrictive set of investment guidelines covering where much of these funds can be invested.

As I see it, our responsibility is to continue to invest in our own capabilities while at the same time educating our clients on the merits of developing these fledgling funding markets.

WALKER I think we have to have more innovation in the mix. If the vision for the next five or 10 years is to have a more diverse market with more variety of issuance I would certainly back this, but the way we get there is by trying some things out. I think the problem here is that at times we run the risk of analysing ourselves to death. It might be better to have a go at some structures and learn as we go.

I think this approach would resonate with local government. It is facing some pretty serious challenges and I think it would appreciate seeing people try things that might solve them.

PURDY It’s hard to go away from the concept of diversity, including on the investor side. We have done a number of debt projects with 20-year tenor or more, and in this space it’s very hard for the government to evaluate because nobody else is doing them – so it can’t tell if it is getting a good deal or not. We would actually welcome a bit of competition in this sense.

MARSH Also on the subject of investor diversity, I’d like to see more education across the investor base about longevity, and how this should enable investors to hold riskier products alongside standard products. Understanding, for instance, that a 40-year linker might not be a bad idea if you are going to live to 90. There is a role for the Financial Markets Authority, banks and different parts of government here.

JONES I think most of the important points are covered, but I’d add that I think we will be able to say we have been successful if we don’t see additional investment allocation away from New Zealand as funds under management grow. I’d also like to see true depth of liquidity across the debt market.

HAGAN It’s important not to lose sight of the issues we started with: New Zealand has a significant investment need around infrastructure at local- and central-government level, and at the same time borrowers that are constrained in their capacity to issue debt through traditional channels.

It is in New Zealand’s interest for capital-market participants to help find financing solutions that allow New Zealand capital to fund the necessary investments that support people’s lifestyle and wellbeing. We all need to work together to make this happen.