The New Zealand government Wednesday welcomed the strong investor demand for its first issue of inflation-indexed bonds in more than a decade.
Finance Minister Bill English said the strong demand for the first issue of September 2025 inflation-indexed bonds was a vote of confidence in New Zealand, at a time when many other countries were dealing with deep-seated economic and financial problems.
"This will help us to continue borrowing at competitive market interest rates, so that we minimize the government's borrowing costs at a time when its finances are tight," English said in a statement.
In the first New Zealand government issue of inflation-indexed bonds since 1999, the Debt Management Office issued 2.5 billion NZ dollars (2.03 billion U.S. dollars) of the 2 percent coupon bonds.
The deal was heavily oversubscribed, with bids in excess of 4 billion NZ dollars, said the statement.
In addition to the coupon rate, investors would receive an inflation adjustment to the capital they had invested every quarter, based on the official Consumer Price Index.