✨ Financial Statements
Vector Limited & Subsidiaries
Gas Distribution Activities
Notes to the Financial Statements
For the year ended 30 June 2005
19. FINANCIAL INSTRUMENTS (CONTINUED)
The weighted average interest rates of interest rate swaps and cross currency swaps are as follows.
| 2005 Weighted average interest rate | 2005 Notional amount $000 | 2004 Weighted average interest rate | 2004 Notional amount $000 | |
|---|---|---|---|---|
| Interest rate swaps (floating to fixed) | ||||
| Maturing in less than 1 year | 7.30% | 27,410 | 7.11% | 38,664 |
| Maturing between 1 and 2 years | 7.22% | 12,775 | 7.32% | 50,873 |
| Maturing between 2 and 5 years | 6.73% | 51,006 | 7.03% | 93,607 |
| Maturing after 5 years | 6.56% | 46,535 | 6.79% | 8,139 |
| 137,726 | 191,283 |
| Interest rate swaps (fixed to floating) |
| Maturing between 1 and 2 years | 6.50% | 25,550 | - | - |
| Maturing between 2 and 5 years | 7.46% | 25,363 | - | - |
| | | 50,913 | | |
| Forward starting interest rate swaps |
| Floating to fixed maturing between 2 and 5 years | 6.70% | 31,891 | - | - |
| Floating to fixed maturing after 5 years | 6.60% | 33,215 | - | - |
| | | 65,106 | | |
| Cross currency swaps (pay leg) - floating | 7.65% | 126,131 | 6.38% | 231,582 |
| Cross currency swaps (receive leg) - floating | 5.99% | 126,131 | 6.05% | 231,582 |
Bank loans, working capital loans, A$ medium term notes and pre-IPO equity securities are based on floating rates. A portion of the bank loans are hedged through interest rate swaps which convert the floating rate into a fixed rate.
The A$ medium term notes are hedged through cross currency swaps (eliminating the foreign currency risk) and interest rate swaps.
The NZ$ medium term notes are fixed interest rate notes. These notes are hedged by the interest rate swaps (fixed to floating).
Fixed interest rate bonds are at fixed interest rates.
The US$ privately placed senior notes are hedged through cross currency swaps (eliminating the foreign currency risk).
The forward starting interest rate swaps (fixed to floating) are to convert the fixed interest rate borrowings to floating rates.
The forward starting interest rate swaps (floating to fixed) are to hedge forecasted future floating rate debt.
FOREIGN EXCHANGE RISK
During the year, Vector Limited privately placed US$ senior notes with US investors. These notes are hedged with cross currency swaps thereby eliminating the foreign exchange currency risk.
The Vector group has also, in this reporting period, conducted transactions in foreign currencies for the purposes of protecting the NZ$ value of capital expenditure.
At balance date the Vector group has no significant exposure to foreign currency risk.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2005, No 197
Gazette.govt.nz —
NZ Gazette 2005, No 197
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