30 June 2020
SHAREHOLDERS APPROVE CHANGE TO LGFA FOUNDATION POLICY COVENANT
The shareholders of the New Zealand Local Government Funding Agency Limited (LGFA) have today approved at a Special General Meeting, the changes to the foundation policy financial covenant set out in its foundation policies.
As advised to the NZX on 4 May 2020 the LGFA board proposed to amend the net debt / total revenue covenant that applies to local authority borrowers with a long-term credit rating of 'A' equivalent or higher. Any changes to the foundation policies require approval by LGFA shareholders.
Local authority borrowers with a long-term credit rating of 'A' equivalent or higher are now required to maintain their net debt / total revenue ratio
• for the financial year ending 30 June 2020 no more than 250%;
• for the financial years ending 30 June 2021 and 2022 no more than 300%; and
• for each of the next four years financial years, a decrease of 5% until a limit of 280% will apply for and from the financial year ending 30 June 2026.
Released on behalf of New Zealand Local Government Funding Agency Limited by Mark Butcher, Chief Executive.
Telephone +64 4 974 6744