Background

The CHFA is the lender to the DHB sector and provides a range of term loans to refinance existing private sector debt or to finance new capital investments.

Organisational responsibilities

The CHFA has a unique position in the health sector as the sole provider of term debt to DHBs. DHBs access CHFA loans to refinance existing private debt, and to fund hospital infrastructure and other capital assets.

The CHFA applies normally accepted lending criteria – recognising that DHBs are required to operate on a financially sustainable basis whilst delivering a high standard of services.

We assess the affordability of investment proposals, structure term debt facilities to support investments, and provide financial advice to DHBs.

Funding for the CHFA loans is provided by the New Zealand Debt Management Office. This allows the CHFA to lend to DHBs at the most cost effective rate.

Debt finance and our lending criteria and independent financial monitoring ensure that DHBs minimise borrowing levels, and maintain sufficient cash flows to meet their loan requirements. By minimising and repaying debt, the DHB sector can build balance sheet provisions for future asset replacement. 

The specific responsibilities of the CHFA are to:

• provide term loans to DHBs and other clients in the health sector.
• assess DHB credit worthiness utilising normally accepted lending practices.
• provide appropriate lending advice.
• report to the Ministers of Health and Finance on the credit worthiness and financial sustainability of DHBs from an independent lender’s point of view and provide early warning of perceived financial risks and mitigation strategies.
• protect the value of the loans and manage risks.
• support the Crown’s objective of providing Crown sourced term debt to DHBs.
• administer loans on behalf of the Crown as instructed by the Responsible Ministers.

For more information click here