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NZDMO picks banks for its inflation-idexed bond syndicate

NZDMO picks banks for its inflation-idexed bond syndicate

The New Zealand Debt Management Office (NZDMO) says it's targeting a November issue of 15-year inflation indexed bonds and has picked ANZ, Deutsche Bank and UBS as joint lead managers of the programme syndicate, with HSBC and RBS Australia as co-managers.

The NZDMO flagged possible consumer price index linked bonds in May's Budget as part of an issuance of up to NZ$12.5 billion worth of bonds in the 2010-11 financial year. It hasn’t issued such bonds since 1999 with just one remaining on issue with a face value of about NZ$1.17 billion. It matures in February 2016. The move came as Treasury forecast inflation to almost treble to 5.9% next year and follows a recommendation from the Government's Capital Markets Development Taskforce and Australia’s reintroduction of indexed debt last year.

NZDMO says the timing of the first CPI indexed bond issuance will be November this year at the earliest, depending on market conditions, and the bond is expected to mature on September 20, 2025.

Although NZDMO hasn't yet announced the size of the CPI indexed bond programme, its Treasurer Philip Combes has previously told it could be in a range between NZ$800 million and NZ$1 billion.

The NZDMO says such bonds should provide long-term cost-effective funding for the Government and provide investors with a hedge against inflation.

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What's the chances of the Gov't fiddling the CPI on which the debt is based?


A certainty AR.

According to information received, the cpi adjustment is taxed......which amounts to bloody theft which ever way you look at it....the rate on the bonds would have to be dam good to overcome that.

Clearly the govt plans to destroy the value of peasant savings by 30% a decade and nothing will stand in their way....not even integrity!