by Rob Hosking
Up to $1 billion worth of infrastructure bonds may eventually be issued.
The government first signalled its interest in the bond idea two Budgets ago and has been talking with the relevant parts of the industry ever since.
Earlier this year, New Zealand Debt Management Office treasurer Phil Coombes told Good Returns a bond issue was likely by the middle of the year and it would be “somewhere between $100 million and $300 million.”
The NZDMO – a branch of the Treasury – is to raise the money for Transit New Zealand, which will then recoup the debt through tolls on the road. There is expected to be two or three maturity periods for the bonds.
Further bond issues are likely fairly soon, and at this stage appear to be confined to roading projects rather than other infrastructure such as the energy sector. Finance Minister Michael Cullen described the bond programme as providing a “cushion” to help fund large roading projects and to bring them forward.
A centrepiece of the Budget was what Cullen called “the biggest road building programme in the country’s history”, with more than 20 specific roading projects specifically named.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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