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Note 19: Borrowings

2017 Forecast Actual
Budget
2016
$m
Budget
2017
$m
30 June
2017
$m
30 June
2016
$m
   

By type

   
71,308 64,533 Government bonds 64,349 65,046
17,754 17,698 Kiwibank  customer deposits 15,960 14,113
7,657 7,183 Settlement deposits with Reserve Bank 6,471 6,878
3,531 3,335 Derivatives in loss 3,113 4,577
3,809 3,928 Treasury bills 4,071 3,799
2,406 2,239 Finance lease liabilities 1,412 1,631
190 205 Government retail stock 190 201
15,043 15,471 Other borrowings 16,240 17,711
121,698 114,592 Total borrowings 111,806 113,956

By maturity

 
33,681 35,253 Expected to be settled within one year 37,370 33,109
88,017 79,339 Expected to be outstanding for more than one year 74,436 80,847
121,698 114,592 Total borrowings 111,806 113,956

By guarantee

 
90,594 83,535 Sovereign-guaranteed debt 81,395 84,043
31,104 31,057 Non-sovereign debt 30,411 29,913
121,698 114,592 Total borrowings 111,806 113,956

Finance leases transfer, to the Crown as lessee, substantially all the risks and rewards incident to the ownership of a leased asset.  Initial recognition of a finance lease results in an asset and liability being recognised at amounts equal to the lower of the fair value of the leased property or the present value of the minimum lease payments.  The capitalised values are amortised over the period in which the Crown expects to receive benefits from their use.

This note constitutes a Statement of Borrowings as required by the Public Finance Act 1989.

All principal, interest and other money payable in relation to money borrowed by the core Crown is a charge on, and payable out of, the revenues of the core Crown equally and rateably with all other general borrowing obligations of the core Crown.

The Government is not liable to contribute towards the payments of debts of Government entities, their subsidiaries or any entity in which the Government has an interest or that is controlled or wholly owned by the Government. Exceptions to this rule only occur for items the Government is liable for under any Act, any guarantee given by the Government, by virtue of an action a creditor has against the Government, or liability the Government has to a creditor of the Reserve Bank.

Other borrowings includes $2,636 million (2016: $3,820 million) of sovereign-guaranteed debt administered by the Reserve Bank and the Treasury.

Government bonds

Actual
30 June
2017
$m
30 June
2016
$m
Government bonds measured at amortised cost 64,349 63,336
Government bonds measured at fair value 1,710
Total Government bonds 64,349 65,046
Actual
30 June
2017
$m
30 June
2016
$m

Government bonds measured at fair value

 
Carrying value 1,710
Amount payable on maturity 1,581

Government bonds are measured at amortised costs, unless they are managed and their performance is evaluated on a fair value basis. Where a bond is evaluated on a fair value basis, it is reported at fair value with movements in fair value reported in the statement of financial performance.

The fair value of Government bonds measured at amortised cost is $68,611 million (2016: $70,414 million). This valuation is based on observable market prices. The valuation of Government bonds reported at fair value is also based observable market prices.

New Zealand Government bonds are rated Aaa by Moody's and AA+ by S&P and Fitch. The rating outlook is stable with Moody's, S&P and Fitch.

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