Draft Long Term Plan 2012-2022 - Hurunui District Council

www.hurunui.govt.nzUnder the Debenture Trust Deed Council’s borrowing issecured by a floating charge over all Council rates levied underthe Rating Act, excluding any rates collected by Council onbehalf of any other local authority. In such circumstances, thesecurity offered by Council ranks ‘Pari Passu’ for all stock issuedby Council including any security stock issued.(e) Secure its borrowing from the LGFA and the performanceof other obligations to the LGFA or its creditors with acharge over the Council’s rates and rates revenue.Council offers deemed rates as security for general borrowingprograms. From time to time, with prior Council and DebentureTrustee approval, security may be offered by providing a chargeover one or more of Councils assets.Physical assets will be charged only where:• There is a direct relationship between the debt andthe purchase or construction of the asset, which itfunds (e.g. an operating lease, or project finance).• Council considers a charge over physical assets to beappropriate.• Any pledging of physical assets must comply with theterms and conditions contained within the DebentureDeed.Debt RepaymentThe funds from all asset sales and operating surpluses willbe applied to the reduction of debt and/or a reduction inborrowing requirements, unless the Council specifically directsthat the funds will be put to another use.New Zealand Local Government Funding Agency LimitedInvestmentDespite anything earlier in this Liability Management Policy, theCouncil may borrow from the New Zealand Local GovernmentFunding Agency Limited (LGFA) and, in connection with thatborrowing, may enter into the following related transactions tothe extent it considers necessary or desirable:(a) Contribute a portion of its borrowing back to the LGFAas an equity contribution to the LGFA, for exampleBorrower Notes;(b) Provide guarantees of the indebtedness of other localauthorities to the LGFA and of the indebtedness of theLGFA itself;(c) Commit to contributing additional equity (or subordinateddebt) to the LGFA if required;(d) Subscribe for shares and uncalled capital in the LGFA; and218