New Zealand Local Government Funding Agency Limited breaks new ground with international bond issuances

Despite a challenging market environment, LGFA issued a seven-year CHF220 million fixed rate bond, a three-year USD500m fixed rate bond and a five-year EUR500m fixed rate bond under the Programme (together, the bonds). The bonds were issued over a three-week period and within two months after the establishment of the Programme.

The LGFA specializes in financing the New Zealand local government sector. Its primary purpose is to provide more efficient financing costs and diversified financing sources for New Zealand local authorities and council-controlled organizations.

Minesh Patel, partner at A&O Shearman, commented: “These landmark deals mark a significant milestone in LGFA’s journey towards diversifying its funding sources. For the first time, they have ventured into international markets, surpassing their previous fundraising activities in Australia and New Zealand. By issuing listed bonds in various currencies, they have demonstrated their newfound ability to access a deep pool of offshore institutional investors which will provide a strong platform for any future trades."

Minesh added: “We are witnessing a growing willingness among international debt investors to engage and provide funding to New Zealand issuers."

The team was led by Minesh Patel, with support from senior associate Yin Lim, lawyer Melanie Campisi and graduate lawyer Clementine Rose. Singapore-based partner Aloysius Tan led on the listing of the Programme and the bonds on the Singapore Exchange Securities Trading Limited, with support from associates Celine Sim and Nick Yap.