## stuff.co.nz Last updated 05:00 10/10/2010
Councils prepare to flex borrowing muscle
By Rob Stock – Sunday Star Times
A bond bank to give local councils access to cheaper borrowing and offering local authority debt for ordinary mum-and-dad investors could be in place as early as August next year. The bond bank, which had its genesis in a brainwave by prime minister John Key when he was in opposition, is being backed by all major councils with the exception of Dunedin City, which came under fire last week from an election candidate over its borrowing process.
The bond bank would enable local authorities to combine their borrowing power. It would manage a portfolio of council debt, and issue liquid securities with high credit ratings secured against it. The securities would be marketed not just here, but overseas where yields are low, driving council borrowing costs down.
Posted by Elizabeth Kerr