LGFA launches fixed rate bond offers, cancel August tender

NZX Announcement
29 July 2020

LGFA launches fixed rate bond offers and cancels 13 August 2020 tender

New Zealand Local Government Funding Agency Limited (LGFA) announced today that it is offering:

a) NZ $300 million unsecured, unsubordinated, fixed rate bonds with a maturity date of 15 April 2037 (2037 Bonds) to institutional and New Zealand retail investors, with the ability to accept unlimited oversubscriptions at LGFA's discretion; and

b) NZ $200 million of an existing series of unsecured, unsubordinated, fixed rate bonds with a maturity date of 14 April 2022 (2022 Bonds) to institutional and New Zealand retail investors, with the ability to accept unlimited oversubscriptions at LGFA's discretion,

together, the 'Bonds'.

2037 Bonds

The Coupon/Interest Rate for the 2037 Bonds will be set by LGFA, taking into account the Issuance Yield, on the Rate Set Date (30 July 2020). LGFA expects the Coupon/Interest Rate to be 2.00% per annum. The Issuance Yield will be the sum of the Margin and the Base Rate on the Rate Set Date. The Margin will be set following a bookbuild on 30 July 2020. The Coupon/Interest Rate, Issuance Yield, Margin and Issue/Settlement Price for the 2037 Bonds will be announced by LGFA via NZX shortly thereafter.

The indicative Margin range for the 2037 Bonds is 0.97% to 1.04% per annum.

The 2037 Bonds are expected to be quoted on the NZX Debt Market.  View Series Notice Here >>

2022 Bonds

The 2022 Bonds will form part of the same series as LGFA's fixed rate bonds maturing on 14 April 2022 with an interest rate of 2.75% per annum, which are quoted on the NZX Debt Market under the ticker code LGF090. The Coupon/Interest Rate will be 2.75% per annum. The Issuance Yield will be the sum of the Margin and the Base Rate on the Rate Set Date. The Margin will be set following a bookbuild on 30 July 2020. The Issuance Yield, Margin and Issue/Settlement Price for the 2022 Bonds will be announced by LGFA via NZX shortly thereafter.

The indicative Margin range for the 2022 Bonds is 0.20% to 0.23% per annum.  View Series Notice Here>>

Other information

The offers will close on 30 July 2020 following the bookbuilds, with the Bonds expected to be issued on 4 August 2020.

LGFA does not intend to offer any additional tranches of the Bonds until its November 2020 tender, currently scheduled for the week commencing 9 November 2020.

Full details of the Bond offers are contained in the Series Notices attached. The offers will each be made as an offer of debt securities of the same class as existing quoted debt securities pursuant to the Financial Markets Conduct Act 2013. The notices required by the Financial Markets Conduct Regulations 2014 have been provided to NZX.

There is no public pool for the Bonds, which will be reserved for the Joint Lead Managers, institutional investors and other primary market participants invited to participate in the bookbuilds.

LGFA has decided to cancel the tender that was scheduled to occur on 13 August 2020.

Arranger and Joint Lead Manager

Bank of New Zealand
Phone: 0800 284 017

Joint Lead Managers

ANZ
Phone: 0800 269 476

CBA
Phone: 0800 272 266

Westpac Banking Corporation
Phone: 0800 942 822

For all investor relations and media queries, please contact:

Mark Butcher, Chief Executive
mark.butcher@lgfa.co.nz/04 974 6744

29 Jul 2020