24 October, 2012
English welcomes demand for inflation bonds
Finance Minister Bill English has welcomed strong investor demand today for the Government’s first issue of September 2025 inflation-indexed bonds.
“The strong demand for the inflation bonds is a vote of confidence in New Zealand, at a time when many other countries are dealing with deep-seated economic and financial problems,” he says.
“This will help us to continue borrowing at competitive market interest rates, so that we minimise the Government’s borrowing costs at a time when its finances are tight.
“For that to happen, it is essential that the Government maintains its responsible management of the economy and its own finances.”
In the first issue of inflation-indexed bonds by the New Zealand Government since 1999, the Debt Management Office today issued $2.5 billion of the 2 per cent coupon bonds. The deal was heavily oversubscribed, with bids in excess of $4 billion.
In addition to the coupon rate, investors receive an inflation adjustment to the capital they have invested every quarter, based on the official Consumer Price Index.