A new 12-year government bond may be a step towards introducing even longer-dated bonds as part of the Government’s borrowing programme, Finance Minister Bill English said today.

Welcoming news that a new May 2021 bond will be introduced at the next tender on May 7, Mr English said the move was in response to feedback from investors.

“We’re always listening to what investors are telling us – particularly with our borrowing programme growing,” he said. “Their feedback is that the market’s preference is for a long-dated bond that will become the new 10-year benchmark bond.

“Issuing longer-dated bonds was also one of the recommendations from the Prime Minister’s Jobs Summit in February and I’m pleased we’ve been able to act quickly on this.”

With the Government’s borrowing requirements forecast to increase to fund projected deficits in the Crown accounts in coming years, it was considering options for developing the domestic bond programme.

“For example, we’re evaluating the merits of introducing an even longer-dated bond – with a maturity longer than 15 years – similar to those which have been part of borrowing programmes in other countries for many years. We’ll talk to market participants before making any decision.