The Local Government Funding Authority got off to a successful start with its first bond issue attracting strong interest from investors.
The new agency plans to borrow $1 billion on behalf of 18 council this year.
At Wednesday's inaugural tender it sold $300 million of three and six year bonds.
The agency is offering two bonds, one maturing in 2015 and the other in 2017. Both offer investors 6% interest.
Chief executive Philip Combes says more than $1 billion worth of bids were received from would-be buyers.
He says good interest from investors kept a lid on the interest rates payable on the bonds.
Mr Combes says there was a degree of uncertainty about LGFA prices relative to Government securities.
He says it came in at about 110 basis points above the Government in the 2017 bonds and about 80 basis points above the Government in the 2015 bonds.
Mr Combes says the LGFA is on track to get its borrowing costs down to 50 basis points above the comparable Government stock rate.