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Govt's Budget 2011 earthquake bonds raise NZ$25 million in almost a year; Quake rate now 2.75%, down from 4% on Budget day

Bonds
Govt's Budget 2011 earthquake bonds raise NZ$25 million in almost a year; Quake rate now 2.75%, down from 4% on Budget day

A Budget 2011 initiative to raise money for the government's NZ$5.5 billion earthquake fund through specific 'earthquake bonds' had netted just NZ$25.4 million by the start of April, Finance Minister Bill English says.

That's almost double the NZ$13 million that had been raised by October last year.

English announced Treasury's Debt Management Office would be issuing the specific bonds at Budget 2011, with the four year bonds initially given an interest rate of 4%.

That has fallen now to 2.75%.

Earthquake bonds are a type of Kiwi bond, although money raised through them goes into the government's NZ$5.5 billion earthquake recovery fund.

At Budget 2011, Treasury officials would not say how much they expected to be raised via the quake bonds, although at the time they told interest.co.nz they expected to halt the declining rate of investment in Kiwi bonds.

At the time there were about NZ$270 million worth of Kiwi Bonds outstanding.

See and compare Earthquake and Kiwi Bond rates with other offers on our rates page here.

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4 Comments

Yeah,  they really want the money for nothing - what did they expect - not even government guaranteed. Why do these Treasury and Politician fellows keep kidding themselves there's a 'free lunch' out there for them but nobody else.

 

This Sky Casino deal has similar implications -  who but the PM could imagine that the taxpayer would not end up funding the majority of money going into the extra machines and then some cleaning up the social dislocation aftermath.

 

Arrogance, stupidity or both. Who knows?    

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I don't know.

But on first principles I'll vote for "both Arrogance & Stupidity"

Perhaps interest.co.nz could run a poll?

 

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25 mil is nothing. Not surprising though due to the low interest rate, which will possibly  be less than inflation once you take out tax. You can get a better rate on call with a bank, and long term interest rates will go up.

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I feel sorry for the buyers of this stuff........pretty sick really. 

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