New Zealand Gazette – 2003 – No. 133

Page 3611

✨ Financial Statements Notes



VECTOR Limited

Electricity Lines Business

Notes to the Financial Statements

For the year ended 31 March 2003

17. FINANCIAL INSTRUMENTS

The VECTOR Group, of which the electricity line business is the predominant activity, has a comprehensive Treasury Policy to manage the risks of financial instruments, which is approved by the Board of Directors. It is subject to a number of financial risks which primarily arise as a result of its debt portfolio.

Interest rate risk

The VECTOR Group, of which the electricity line business is the predominant activity, has long-term borrowings, which are used to fund ongoing activities. The VECTOR Group, of which the electricity line business is the predominant activity, actively manages interest rate exposures in accordance with Treasury Policy. In this respect, at least 40% of all term debt must be at fixed interest rates or effectively fixed using interest rate swaps, forward rate agreements, options and similar derivative instruments.

The weighted average rates of borrowings are as follows:

2003 Weighted average interest rate 2003 Face value $'000 2002 Weighted average interest rate 2002 Face value $'000
Bank loans 6.31 700,864 7.10 104,810
Commercial paper - - 4.94 11,484
Working capital loan 6.18 4,000 - -
Medium term notes – fixed rate NZ$ 6.50 109,792 - -
Medium term notes – floating rate A$ 5.33 314,155 - -
Capital bonds 8.25 288,010 - -
Balance at end of year 6.34 1,416,821 6.42 116,294

The weighted average rates of interest rate swaps are as follows:

2003 Weighted average interest rate 2003 Face value $'000 2002 Weighted average interest rate 2002 Face value $'000
Interest rate swaps
Maturing in less than 1 year 7.16 85,243 - -
Maturing between 1 and 2 years 6.97 103,441 7.17 20,000
Maturing between 2 and 5 years 6.94 415,679 7.12 50,000
Maturing after 5 years 6.69 132,174 - -
Balance at end of year 6.92 736,537 7.13 70,000

| Cross currency swaps | 5.33 | 314,155 | 7.10 | 104,810 |



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2003, No 133


Gazette.govt.nz — PDF NZ Gazette 2003, No 133




✨ LLM interpretation of page content

🏭 Vector Limited Financial Position Statements (continued from previous page)

🏭 Trade, Customs & Industry
31 March 2003
Electricity, Financial Instruments, Interest Rate Risk, Borrowings, Debt Portfolio, Treasury Policy, Bank Loans, Commercial Paper, Working Capital Loan, Medium Term Notes, Capital Bonds, Interest Rate Swaps, Cross Currency Swaps