New Zealand Local Government Funding Agency Limited Analysis

Overview

The New Zealand Local Government Funding Agency (LGFA) is a Council-Controlled Organisation (CCO) operating under the Local Government Act 2002. LGFA specialises in financing the New Zealand local government sector, operating with the primary objective of optimising the debt funding terms and conditions for participating local authorities.

Among other things, this includes:

• Providing debt to participating local authorities at the lowest possible interest rates,
• Making longer-term borrowings available to participating local authorities, and
• Increasing the certainty of access to debt markets for participating local authorities

Performance

The following information was extracted from New Zealand Local Government Funding Agency Limited's full year results, released 28 August 2025:

2024-25 Financial and operational performance

Directors are pleased we have delivered a record financial and operational performance:

Total interest income for the financial year was NZ$1,267 million, a 4% increase over the prior year.

Total operating income of NZ$35.6 million was $4.4 million above the Statement of Intent (SOI) forecast primarily due to our offshore cost of borrowing being lower (after hedging costs) than borrowing in the domestic debt capital markets. Larger holdings of liquid assets also improved income.

Operating expenses, excluding Approved Issuer Levy (AIL), at NZ$11.2 million were $0.2 million under the SOI forecast. AIL expense for the year totalled $5.3 million, in line with our SOI forecast.

Net operating profit rose to NZ$19.0 million, up 89% from the previous year.