Crown Cashes In Its Chorus Loans a Decade Early, Books a $60 Million Gain

The Crown has monetised the interest-free loans it made to Chorus, ten years before they were due to come back. The loans were advanced between 2012 and 2023 to build the fibre network, carried a book value of $642 million, and were not scheduled for repayment until 2036. The transaction returns roughly $702 million in net proceeds. Finance Minister Nicola Willis reports a gain of more than $60 million over book value.

Sixty million dollars is a good result on paper, and it is also what fourteen years of lending money at zero percent looks like at the moment you stop. The buyer is paying a premium for a stream the Crown was always going to receive, only later. Infrastructure Minister Chris Bishop notes the UFB securities are not ordinary shares, and that nothing changes about who owns Chorus or what it provides.

The proceeds are earmarked for the Cambridge to Piarere road, hospital upgrades, and hundreds of new classrooms. Every dollar of it was already owed to the Crown before anybody announced anything. What is new is the timing. The money is arriving early and has been given a list of things to do, which was also true of the money when it was arriving in 2036.