The New Zealand Debt Management Office, which runs a NZD36 billion (USD26.05 billion) debt portfolio, is looking at using interest rate options in next fiscal year. "We're doing further detailed work on valuations for interest rate options," said Philip Combes, treasurer in Wellington.
The agency has been studying the instruments since last year (DW, 3/28/04) but it had not been a priority because of strong domestic demand for traditional bond issuance. Although progress has been slow, the agency is now testing its models and talking with counterparties, noted Combes. He declined to name potential counterparties for such transactions. The debt office has thus far issued NZD1.35 billion out of a planned NZD2.15 billion this fiscal year, which ends at the end of June.
