Be confident in Bonus Bonds
Bonus Bonds and the Government deposit guarantee scheme
Bonus Bonds is not currently covered by the Government scheme. However, Bonus Bonds continues to hold the highest possible fund credit rating of AAAf from independent credit rating agency Standard & Poor's. The rating indicates that "The Trust Fund's portfolio holdings provide extremely strong protection against losses from credit defaults."
To be eligible for coverage, collective investment schemes such as Bonus Bonds are required to invest their funds "exclusively in New Zealand government securities or debt securities issued by institutions covered by the Crown guarantee". Over 70% of Bonus Bonds investment holdings are in New Zealand government securities and debt securities issued by institutions covered by the Crown Retail Deposit Guarantee Scheme or Wholesale Funding Guarantee Facility.
Bonus Bonds investments with institutions not covered by the Crown guarantee are advantageous to Bondholders in two ways: by providing good returns and by having strong credit ratings that justify the AAAf credit rating assigned to Bonus Bonds, the highest possible fund credit rating.
As the opportunity arises to increase the level of Bonus Bonds investments with institutions covered by the Crown guarantee, we will consider doing so provided any new investments are also advantageous to Bondholders, generating good returns and allowing Bonus Bonds to retain its AAAf credit rating. A fund credit rating issued by Standard & Poor's is and must be construed solely as a statement of opinion and not a statement of fact or recommendation to purchase, sell or hold Bonus Bonds.
For more detail about the Crown guarantee, visit www.treasury.govt.nz/economy/guarantee/retail/qanda.
When you're a Bonus Bond holder, you're really on to a good thing. Bonus Bonds were assigned the first ever 'AAAf' fund credit rating in New Zealand from Standard & Poor's, a leading worldwide provider of independent credit ratings. Fund credit quality ratings range from 'AAAf' (highest level of protection) to 'CCCf' (lowest level of protection), are identified by the subscript 'f' for fund, and represent Standard & Poor's assessment of the overall credit quality of a fund's portfolio holdings. A AAAf fund credit rating issued by Standard & Poor's indicates that "The Trust Fund's portfolio holdings provide extremely strong protection against losses from credit defaults".
Since AAAf is the top rating available, you'll have more reason to sit back, have fun and enjoy the anticipation of the prize draws each month.
Credit ratings assigned by Standard & Poor's Rating Services are statements of opinion, not statements of fact or recommendations to buy, hold or sell any securities. Credit ratings may be changed, withdrawn or suspended at any time.
For a complete listing of Standard & Poor's credit rating definitions, go to the Standard & Poor's website: www.standardandpoors.co.nz.
Bonus Bonds investment policy
The Bonus Bonds Trust generates the money for the monthly prize draws by investing funds in low-risk debt securities, specifically from issuers that are rated 'A' or better for credit default risk by Standard & Poor's - issuers such as the Government, selected local authorities, New Zealand registered banks and selected corporates.
Bonus Bonds Prospectus (PDF 2mb) and a summary of Bonus Bonds terms and conditions.
You've got to be in to win!
Get in on the fun.
A minimum purchase of $20 of Bonus Bonds is required. Bonus Bonds are first eligible for the monthly prize draws when they've been held for one complete calendar month following their purchase date.
