Finance Minister Bill English has announced that New Zealand's government guarantee for wholesale bond issues by banks will end on April 30, following the end of a similar Australian guarantee from March 31. The guarantee was used by New Zealand's banks to issue NZ$10.3 billion worth of bonds under 24 guarantee certificates. There have been no payouts and the guarantee fees earned the government NZ$290 million in fees, English said. The guarantee was set up in November 2008 in the middle of the financial crisis after Australia's government set up a similar scheme. "It helped our banks access funding during that crisis, but international market conditions have improved and continue to improve in 2010," English told the New Zealand-Australia Investment Forum in Auckland today. New Zealand banks are now raising funds without using the guarantee, which was always envisaged as a temporary measure for extraordinary times," English said. The lifting of the guarantee showed "our markets have normalised and New Zealand is a good place to invest."
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