Date: August 31st, 2012
LGFA issues over $1b dollars in bonds in just eight months
The Local Government Funding Authority (LGFA) has just issued its sixth bond tender which has bought issuance to date
past the $1b mark.
The LGFA was incorporated on December 1st 2011 and aims to provide more efficient funding costs and diversified funding
sources for shareholding local authorities. The Government, Hastings District Council, and 17 other councils from around
the country are the initial shareholders in the LGFA.
Earlier this year, Hastings District Council took a $15m, seven year loan with the LGFA to fund infrastructure and
capital works programmes and renew existing borrowings. This loan was secured at a margin that is significantly lower
than council would have achieved, had it gone to the capital markets in its own right.
Chief Financial Officer Tony Gray says “The latest bond issue by the LGFA is another significant milestone for the
organisation. It was expected that they would hit the $1b dollar mark at some time during the 2012 calendar year but
this has been achieved in just eight months of operation.”
Mr Gray says “16 councils have now borrowed from the LGFA and it is expected that other councils will look at
participating in future bond tenders. Investors are also looking very favourably at the LGFA as margins tighten in other
investment areas.”