by Rob Hosking
The level of debt the bonds are being issued specifically to raise debt for the toll motorway being constructed between Orewa and Puhoi north of Auckland.
The value of the debt is somewhere between $100 million and $300 million, says Coombes.
The NZDMO – a branch of the Treasury – is to raise the money for Transit New Zealand, which will then recoup the debt through tolls.
There may be bonds of two different durations, says Coombes. The feedback from earlier consultation was that a period of maturity would probably be longer than the usual time for government bonds.
“That’s something we still want to talk to the market about. The maturity of the bonds will need to be designed to suit the requirements of the roading project. Final decisions haven’t been taken yet but there may well be more than one maturity period to fund this particular project.
“We are still looking at what the best way is to issue relatively small amounts of long-dated bonds. Would we do that through a conventional tender process or some other way? We haven’t yet made a decision on that.”
The NZDMO has also still to finalise its agreement with Transit New Zealand.
“We certainly haven’t sorted out all the detail, but we do expect that at this stage we’ll be issuing in the first half of the year.”
There are not at present any plans to issue bonds for other infrastructure projects.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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