Investor Relations

Published: 26 June 2019

This page is intended to provide information for wholesale investors only

Housing New Zealand is the largest residential property owner in the country, owning or managing around 64,000 properties that house more than 185,000 New Zealanders.

Key to our vision of building lives and communities by housing New Zealanders is:

  • ensuring our customers live well, with dignity and stability, in connected communities, and
  • shaping investments in the portfolio to better meet public housing needs over the long term.

In addition to a strong focus on positive social outcomes, our recently-established Environment Strategy develops strategic responses that are tailored to address our environmental impacts and areas of influence.

Latest news

Housing New Zealand issues the first sustainability bond for the New Zealand market

2 April 2019

Housing New Zealand (HNZ) recently issued $500 million of a new 7.5-year Sustainability Bond, the first bond issue of its type for a public sector entity and the New Zealand market.

HNZ Board Chair Adrienne Young-Cooper welcomed the issue and said the Crown agency was taking a leading role in the issuance of a Sustainability Bond which is a first for the New Zealand market, as is the alignment of this bond with the United Nations Sustainable Development Goals.

The bond was issued on 28 March 2019 at a yield of 2.247% and lifted HNZ’s total market debt to $1.45 billion (made up of $1.30 billion medium term notes and $0.15 billion commercial paper).

Offshore investors accounted for 21% of the final allocation, up from 11-14% seen in prior bond issues, and the book included new names with specific Environmental Social and Governance (ESG) mandates which adds diversification to HNZ’s investor base.

"The proceeds raised from the Sustainability Bond issue are earmarked for expenditure that has positive environmental and social outcomes, including building homes that meet certain green criteria as well as homes that incorporate mobility and accessibility considerations into their design," says Mrs Young-Cooper.

"Key environmental and social outcomes are driven by HNZ’s Environment Strategy and Customer Strategy and the issue is aligned with HNZ’s Sustainability Financing Framework (released 8 March 2019), detailing eligible expenditure categories and the process for managing proceeds."

This latest bond issue is part of a long-term borrowing programme which is contributing most of the finance for HNZ’s largest investment in its building programme for decades as it increases the scale and pace of delivering new homes.

From June 2018 to June 2022 HNZ will invest $5.6 billion in its housing stock, resulting in a net increase of 1,100 additional state homes each year for that period, with the financing also being used for a renewal programme to significantly upgrade most of HNZ’s older housing stock.

Mrs Young-Cooper says the reporting requirements for the Sustainability Bond will be integrated into HNZ’s Annual Report, in line with emerging best practice.

HNZ plans to continue issuing in this format, as well as honouring its commitment to the market to add some supply to two of the three standard bonds already issued.

Financing

Housing New Zealand made its re-entrance to debt capital markets in 2018, following a 19-year absence. This was made possible by the then National-led Government’s 2017 decision to increase the limit on market debt to $1.08 billion to help finance the Auckland Housing Programme. In 2018, the current Labour-led Government raised this limit to $3.05 billion to account for the state house build programme announced in the May 2018 Budget.

Access to debt capital markets is important for Housing New Zealand, given it provides the flexibility and appropriate level of control required for our stewardship responsibilities - over 45,000 of our homes are reaching the end of their useful lives over the next twenty years and need to be renewed.

In addition to standard domestic bond issuance, our newly-established Sustainability Financing Framework provides us with the opportunity to link financing with better outcomes for our customers and the environment. Future issuance in sustainability format will be considered alongside our commitment to continue building liquidity in standard bond maturities.

 

S&P Global Ratings (S&P) first rated Housing New Zealand in 1996. Credit ratings are assigned to both Housing New Zealand Limited (HNZL) and Housing New Zealand Corporation (HNZC). HNZL (the issuer) is 100% owned by HNZC.

The ratings are equalised with the New Zealand Government, reflecting S&P’s view that there is an ‘almost certain’ likelihood that the New Zealand government would provide timely and sufficient extraordinary support to HNZC in the event of financial distress.

HNZC and HNZL credit ratings – latest update 31 January 2019

Rating type Rating Outlook
Local currency LT AA+ Positive
Local currency ST A-1+  
Foreign currency LT AA Positive
Foreign currency ST A-1+  

Full S&P ratings reports:

A credit rating is not a recommendation to buy, sell or hold any securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency.

Maturity

Coupon

Amount on issue

Issue date

12 June 2023 2.97% $300m 12 June 2018
12 June 2025 3.36% $250m 12 June 2018
5 October 2026 2.247% $500m 5 April 2019
18 October 2028 3.42% $250m 18 October 2018

Term sheets:

1 June 2018 - 2023 and 2025 maturities [PDF, 631 KB]

28 March 2019 - 2026 maturity [PDF, 688 KB]

12 October 2018 - 2023 and 2028 maturities [PDF, 703 KB]

Our commitment to sustainability

We are committed to sustainability through the implementation of our Customer Strategy, Environment Strategy and key measures of success outlined in the 2017-2021 Statement of Intent.

We recognise the potential for carbon emissions of buildings to contribute to global warming and acknowledge the importance of generating both positive environmental and social outcomes through our operations, build programmes and influence on our customers.

Our vision for sustainability is strategically aligned with Government commitments to international agreements, including the United Nations Paris Agreement, and Sustainable Development Goals, as well as its focus on wellbeing as a measure of living standards.

Key documents

Disclaimer

The information on this webpage is issued by Housing New Zealand Limited for informational purposes. To the extent that this webpage refers to an offer of securities, no offer is made to anyone accessing this webpage outside of New Zealand and otherwise than in compliance with any applicable securities laws or regulations. To the extent that this webpage refers to any offer of securities to any person in New Zealand, such offer will be made to only wholesale investors and in accordance with the Financial Markets Conduct Act 2013 (FMCA).

Users accessing this webpage acknowledge and accept that they will comply with any applicable securities laws or regulations (including, without limitation, the FMCA).

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