Manukau City Council has announced plans to raise NZ$90 million through two bond issues aimed at 'Mum and Dad' investors. The 4 year and 6 year bonds will offer rates of 6.15% and 6.9% respectively. Finance Director Dave Foster said the council was taking the step to diversify its funding and provide more funding certainty. "This funding will help us provide the assets, services and facilities needed to shape Manukau "“ and ultimately the greater Auckland region "“ for the benefit of our residents and businesses," Foster said. The council said it had taken the formation of the new Auckland Council into account when deciding on the bond issue and had approval from the Auckland Transition Authority, given the bonds are for four and six years and therefore extended beyond November 2010, when the Auckland Council comes into existence. "This is an exciting initiative, and provides a new opportunity for the wider community to invest in the city's growth and development in the long term," Foster said. The offer will be open from 22 July to 30 September 2009, and has a minimum investment for each series, of NZ$10,000 and amounts of NZ$1000 after that. The bonds are secured over the rates of the city through a Debenture Trust Deed. They will have first ranking priority (except in limited circumstances where the law may decide otherwise), alongside other council debt secured under the trust deed. There was no mention of a credit rating. Manukau City Council also made no mention of the 'bond bank' suggested at the Jobs Summit as a way for councils to raise funding jointly and more cheaply. BNZ Capital is arranging the bond issue. Here is the term sheet below. ManukauBondRatecard
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.