‘Think big’ loan on better terms

Press, 4 February 1987, Page 2

‘Think big’ loan on better terms

Wellington reporter , Final borrowing to refinance the “think big” projects on more favourable terms was done last Friday, said the Minister of Finance, Mr Douglas, yesterday. The $425 million borrowing was made through a 200 million EC(J bond issue in' the Euromarket, at a coupon rate of 7% per cent. The issue was lead managed by Banque Paribas. The ECU (European Currency Unit) is based on a basket of European currencies. “This is the second time New Zealand has borrowed ECUs,” Mr Douglas said. “However, we will be taking advantage of favourable market conditions to swap this borrowing into- United States dollar debt.”

This was a cheaper method of borrowing in this case than directly issuing United States dollar debt he said.

The borrowing effectively completed the task of raising funds to refinance the debt on the “think big” ; projects. Borrowing to refinance the “think big” projects follows up decisions in the 1986 Budget whereby the Government would take all liabilities relating to the major projects on to its own books. This would allow better management of the huge debts involved and had allowed borrowing on more favourable terms, Mr Douglas said. It meant that total overseas loans raised this financial year came to about $lO,OOO million.