Strong interest in Manukau City Council bond offer

Press Release – Manukau City Council

Manukau City Council’s bond offer has already met with a positive response before its opening date, with bids in the bookbuild process used to set the minimum interest rate and issue margin substantially exceeding the offer size. The council is now …Strong interest in Manukau City Council bond offer

Manukau City Council’s bond offer has already met with a positive response before its opening date, with bids in the bookbuild process used to set the minimum interest rate and issue margin substantially exceeding the offer size. The council is now accepting over-subscriptions to take the total offer to $350 million.

While there will be no public pool because the bonds have been taken up in firm bids through the bookbuild process, interested investors can still take up the opportunity through their financial adviser.

Manukau City Council has set the minimum interest rate and the issue margin for the bonds. The minimum interest rate is 6.45 per cent per annum and the issue margin is 1.90 per cent.

Finance director Dave Foster says the council is delighted with this level of response.

“It indicates the confidence people have in both the council and the future of the Auckland region.”

The offer, which is a seven-year bond maturing in 2017, opens tomorrow (1 September) and closes on 24 September. Early-bird interest on the bonds will accrue at the Official Cash Rate from the time an investor’s application money is banked and so investors are encouraged to apply for their bonds early. The final interest rate will be announced on 27 September 2010.

The bonds are secured, fixed rate bonds that mature on 29 September 2017, with interest paid semi-annually. The issue price is $1.00 per bond with a minimum application amount of $5,000, thereafter in multiples of $1,000.

The bonds are secured over the rates of Manukau city through a Debenture Trust Deed. They will have first ranking, alongside other council debt secured under that trust deed. From 1 November the bonds will be secured over the rates of Auckland Council.

A detailed description of the security including the effect of the Auckland regional governance reorganisation is set out in the Investment Statement, which is available on the council’s website www.manukau.govt.nz under the “Bond Issue” link.

ENDS

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