Chance to deepen capital markets, says Commerce Minister

The NZX says $5.2 billion has been raised in the first four months of this year - $2.1b in debt.

A shift by corporates towards capital raising through the debt market should be used as an opportunity to deepen New Zealand's capital markets, Minister of Commerce Simon Power says.

With the global financial crisis making it harder and more expensive to raise capital directly from offshore, companies needed to look at new ways to access capital.

Debt and equity capital markets played an important role in that, with a number of companies successfully tapping into the retail bond market in recent months, said Power.

Corporates which had recently issued large amounts of debt securities -- Fonterra, Telecom, Fletcher Building, Genesis Energy, Auckland International Airport, and Contact Energy -- had all closed with their bond offers fully subscribed.

"We can, and should, use this shift towards capital-raising via the debt market as an opportunity to deepen our capital markets," Power told an Institute of Finance Professionals New Zealand forum today.

"We should take note of how well our capital markets are coming through this crisis. Now is the time to grasp the opportunities the crisis offers."

Earlier this month NZX reported that in the first four months of 2009 $3.2 billion in capital was raised.

That included $2.1b in debt and $1.1b in equity, and was already higher than the $3.1b raised for all of 2008.

Power today said that in the short-term, the Government was working to ensure companies retained access to capital and to restore investor confidence.

Longer term it was vital to get long term regulatory settings right, with a review of the Securities Act under way.

- NZPA