Moore says bonds could fund rebuild
The cash-strapped Christchurch City Council should raise bonds against its assets to pay its share of the rebuild costs, says former mayor Garry Moore.
He said the council should consider following Auckland, which had raised tens of millions of dollars in recent years through bond offers.
Moore, a chartered accountant and former board member of the city council's investment arm, Christchurch City Holdings Ltd (CCHL), said a bond issue could raise much-needed funds for the rebuild of central Christchurch.
"Instead of selling assets, why does CCHL not issue bonds? There are funds around the world seeking safe investments right now," he said.
"The Christchurch City Council has an AA credit rating and a compelling story to tell of a disaster which has hit us. This is a good opportunity to market to the international investment sector."
A pool of bonds could be set aside for the ratepayers and residents of Christchurch.
"Central government has the gun against the head of local government and is pressing it to sell its assets, but there are assets that we own that should never be sold because they are of fundamental strategic importance. But we can leverage off them," Moore said.
Pressure has been put on the council to consider selling some assets to fund its share of the rebuild since the release late last month of the central-city blueprint.
Canterbury Earthquake Recovery Minister Gerry Brownlee has warned the council that it is "going to have to find a lot of funds".
He has stopped short of directly calling on the council to sell or partly sell some of its assets to fund the projects, but he has alluded to it by congratulating the Canterbury Employers' Chamber of Commerce for putting options on the table that he thought the council should consider.
The business group has been encouraging the council to consider the sale or partial selldown of its assets.
Chamber chief executive Peter Townsend said yesterday that raising bonds was one of several options the council should be looking at.
"The council thinks they have sufficient resources to effect the rebuild . . . but we are not convinced that [they] have any wriggle room and we're not convinced they are in a position that they can confidently say that just by raising rates and increasing debt they can cover the cost of the rebuild, so we want them to explore all options," he said.
- © Fairfax NZ News
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