Auckland Council opens new retail bond offer

Press Release – Auckland Council
Auckland Council today offered a retail bond issue for sale as it seeks to raise up to NZ$125 million to fund investment in Auckland’s infrastructure. The offer, which is for 6-year, fixed-rate secured bonds, closes at 12 noon on Friday 14 December.

The bonds, which will be issued for a term of six years (maturing 18 December 2018), carry a credit rating of AA from Standard & Poor’s and Aa2 from Moody’s.

“Auckland Council is one of the best-rated entities in the country, our retail bond offer provides ratepayers and other retail investors the opportunity to invest alongside institutional investors and banks in Auckland’s growth and see tangible outcomes from their investment.” says Chief Finance Officer, Andrew McKenzie.

“The offer is an effective and efficient way to raise debt to fund infrastructure investment. When managed well, debt is a sensible way to fund our new capital projects and achieve the goal of making Auckland the world’s most liveable city,” he says.

The minimum investment level is NZ$5,000, with multiples of NZ$1,000 thereafter.

The bonds form part of council’s overall borrowing programme to fund its investment in the region that will benefit all Aucklanders for generations to come. Projects funded by the sale will include improved public transport, sports fields, new libraries and community facilities.

The interest rate will be finalised on Friday 14 December and will be the aggregate of the applicable 6-year swap rate at that time plus a margin of 1.05 per cent per annum on that date.

Investors wishing to obtain an investment statement for this offer can:
* contact one of the lead managers: ANZ on ph: 0800 269 476 or Bank of New Zealand on ph: 0800 284 017
* go online to * contact an authorised financial advisor.

The bonds are secured by a charge over the rates revenue of Auckland Council and will rank equally with all other secured debt of Auckland Council. The security is first ranking although other security is preferred by law (including security interests that may have priority under the Personal Property Securities Act).

Application has been made to NZX for permission to quote the bonds on the NZDX. However, the bonds have not yet been approved for trading and NZX accepts no responsibility for any statement in this announcement. NZDX is a registered market and NZX is a registered exchange under the Securities Markets Act 1988.

Council reserves the right to vary the closing day of the offer. Applications for the bonds can only be made using the application form contained in the Investment Statement.

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