EXHIBIT (c)(ix)
Queensland Treasury Corporation’s 2008-2009 Indicative Borrowing Program
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 | | MEDIA RELEASE Embargo: 4:30pm AEST 25 June 2008 |
QTC announces Indicative Borrowing Program for 2008–09
Queensland Treasury Corporation (QTC), the Queensland Government’s central financing authority and corporate treasury services provider, estimates that its funding requirement for the financial year 2008–09 will be $16.3 billion. This comprises $6.7 billion to refinance maturing debt (including the maturity of its July 2009 Benchmark bond) and $9.6 billion to meet the new funding requirements of the Queensland public sector. (See attachment for further details.)
QTC notes, however, that in response to the significant level of uncertainty seen recently in global financial markets, a precautionary decision was taken earlier this year to extend QTC’s liquidity horizon out to 12 months, from its usual 6 months. QTC anticipates that, should market conditions normalise at some point during the 2008–09 borrowing program period, it may decide to revert to its usual 6 month liquidity horizon, which would release funds of up to $2 billion for general funding purposes and thus reduce the funding requirement by an equivalent amount.
Approximately 65% ($10.6 billion) of QTC’s 2008–09 borrowing program will be funded through the issuance of Australian dollar denominated benchmark bonds, with the balance funded through commercial paper and medium-term note issuance.
In the recent announcement of Queensland’s State Budget, Treasurer Andrew Fraser, forecast a strong rise in Government investment, with more than $17 billion this year allocated for capital works. “The Government’s commitment to significant investment in vital water, transport and energy infrastructure is unwavering at a time when Queensland is well supported by a strong economy, strong population growth, a strong balance sheet and is looking forward to a strong future,” the Treasurer said.
Capital expenditure in the State this year, including local authorities, is expected to be more than $20 billion, with the debt portion of $12.4 billion to be funded by QTC.
Looking forward, it is anticipated that future QTC borrowing programs will continue to reflect the Queensland Government’s ongoing commitment to significant investment in the State’s infrastructure. Future borrowing requirements, however, may be partially offset by the extent to which Queensland’s fiscal position exceeds current forecasts.
Review of 2007–08 funding activity
Debt raisings for the 2007–08 year (currently estimated at $13 billion) exceeded the mid-year review estimate of $9.4 billion by $3.6 billion, due primarily to retirement of 2009 benchmark bonds ($865 million) and funding in advance of customer borrowings ($2.7 billion). Borrowings were sourced through the following facilities:
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• Domestic bond: | | $7.1 billion (including $275 million of capital indexed bonds) |
• Global bond: | | $4.1 billion |
• Medium-term note: | | $297 million |
• Commercial paper: | | $1.5 billion |
GPO BOX 1096, BRISBANE QLD AUSTRALIA 4001
TELEPHONE 07 3842 4600 · FAX 07 3221 4122
www.qtc.com.au
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Solid domestic and foreign investor demand for QTC’s A$ benchmark bond lines continued during the year, as investors sought high credit quality assets in an uncertain global market environment, and provided the majority of funding. Demand for QTC’s commercial paper was also strong.
Highlights for the 2007–08 year included:
| | • | | Refinancing the maturity of QTC’s 14 September 2007 benchmark bond, which had $3.2 billion outstanding as at 30 June 2007. |
| | • | | In September 2007, QTC was the first Australian Government entity to issue a bond in the New Zealand dollar denominated ‘Kauri’ format. The ten-year deal, issued under its Euro medium-term note program, was for NZ$375 million, with a coupon of 7.125% and a maturity date of 18 September 2017. The issue was well bid by the market and added further diversification to QTC’s funding base at an attractive cost. |
| | • | | In November 2007, the amount on issue of QTC’s 2.75%, 20 August 2030 Capital Indexed Bond was increased by A$275 million, taking total issuance to A$543 million. Investor demand for this inflation-linked bond was strong, with total bid volumes tendered significantly greater than the amount allotted. |
| | • | | In March 2008, a new long-dated QTC domestic preferred bond line maturing in 2033 was established through an initial issue of A$500 million. |
| | • | | In May 2008, QTC launched a new A$ domestic benchmark bond with a coupon of 6.5% and a maturity date of 16 April 2012. The issue was very well supported by the market, with the volume on issue building to almost $2 billion in the first week. |
It is estimated that the change in outstandings for QTC’s funding facilities over the full 2007-08 financial year will be as follows:
| | | | | | | | |
Funding facility | | 30 June 2007 | | 30 June 2008 | | | Change | |
| | | A$M | | A$M (estimate) | | | A$M (estimate) | |
Domestic benchmark bond | | 20,468 | | 25,400 | | | 4,932 | |
Global benchmark bond | | 11,659 | | 14,380 | | | 2,721 | |
Capital indexed bond** | | 278 | | 583 | | | 305 | |
Domestic non-benchmark bond | | 598 | | 601 | | | 3 | |
Euro medium-term note (MTN) | | 159 | | 402 | | | 243 | |
Commercial paper | | 613 | | 1,456 | | | 843 | |
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Total | | 33,775 | | 42,822 | (estimate) | | 9,047 | (estimate) |
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| ** | includes capital indexation |
Next review of QTC’s borrowing requirements
The mid-year update of QTC’s borrowing requirement for 2008–09 is scheduled for release in January 2009.
ENDS
For further enquiries, please contact:
Richard Jackson, General Manager, Financial Markets Ph: +61 7 3842 4789
Mike Gibson, Senior Portfolio Manager, Funding Ph: +61 7 3842 4775
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QTC Indicative Borrowing Program for 2008–09 financial year
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Borrowing details | | 2008-09 | | | 2007-08
(revised*) | |
| | | A$M | | | A$M | |
Refinancing of maturing debt: | | | | | | |
A$ benchmark bonds | | 0 | | | 3,173 | |
A$ non-benchmark bonds | | 69 | | | 101 | |
Medium-term notes (MTNs) | | 0 | | | 52 | |
Commercial paper 1 | | 1,457 | | | 613 | |
| | | | | | |
Total maturing debt | | 1,526 | | | 3,939 | |
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Adjustments: | | | | | | |
Prefunding of Sep 2007 Benchmark Bond maturity | | — | | | (1,500 | ) |
Prefunding of Jul 2009 Benchmark Bond maturity | | 5,741 | | | — | |
Principal repayments from QTC customers | | (600 | ) | | (600 | ) |
Total refinancing | | 6,667 | | | 1,839 | |
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New borrowing: | | | | | | |
Capital works and asset procurement | | 12,365 | | | 10,772 | |
Funding in advance of customer borrowings | | (2,700 | ) | | (3,219 | ) |
Total new borrowing | | 9,665 | | | 7,553 | |
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TOTAL BORROWING PROGRAM 2 | | 16,332 | | | 9,392 | |
The 2008-09 borrowing estimate of $16,332 million is expected to be funded as follows:
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Funding source | | Expected raisings 2008-09 |
| | Range | | Low | | High |
| | | % | | A$M | | A$M |
Term raisings: | | | | | | |
A$ bonds 3 | | 60–70 | | 9,800 | | 11,430 |
MTNs & other currency loans | | 5–15 | | 820 | | 2,450 |
| | | |
Commercial paper raisings: | | | | | | |
TNotes, ECP, USCP | | 20–30 | | 3,270 | | 4,900 |
| 1. | Estimated commercial paper outstanding as at 30 June. |
| 2. | Funding activity may vary depending upon actual customer requirements, the State’s fiscal position and financial market conditions. |
| 3. | Includes A$ domestic and global benchmark bonds, capital indexed bonds and other term issuance. |
| * | Based on the State’s Mid Year Fiscal and Economic Review released on 14 December 2007. |
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