✨ Financial Statements Notes
Vector Limited
Electricity Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
20. FINANCIAL INSTRUMENTS (continued)
The weighted average interest rates of interest rate swaps and cross currency swaps are as follows.
| 2006 | 2005 | |||
|---|---|---|---|---|
| Weighted average interest rate | Notional amount $000 | Weighted average interest rate | Notional amount $000 | |
| Interest rate swaps floating to fixed | ||||
| Maturing in less than 1 year | 7.30% | 57,612 | 7.11% | 87,452 |
| Maturing between 1 and 2 years | 7.19% | 215,468 | 7.30% | 104,109 |
| Maturing between 2 and 5 years | 6.79% | 194,726 | 6.87% | 291,506 |
| Maturing after 5 years | 6.80% | 230,447 | 5.71% | 33,315 |
| 698,255 | 516,382 |
| Interest rate swaps fixed to floating |
| Maturing between 1 and 2 years | 6.50% | 166,211 | - | - |
| Maturing between 2 and 5 years | - | - | 6.50% | 166,575 |
| | | 166,211 | | 166,575 |
| Forward starting interest rate swaps |
| Floating to fixed maturing between 2 and 5 years | 8.83% | 77,628 | 6.70% | 166,575 |
| Floating to fixed maturing after 5 years | 6.45% | 119,030 | 6.61% | 116,602 |
| | | 196,658 | | 283,177 |
| Cross currency swaps (pay leg) - floating | 8.13% | 824,289 | 7.56% | 825,968 |
| Cross currency swaps (receive leg) - floating | 5.93% | 824,289 | 5.81% | 825,968 |
Bank loans, working capital loans, A$ medium term notes 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 (floating to fixed).
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. These notes are hedged by the interest rate swaps (fixed to floating).
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) shall convert the fixed interest rate borrowings to floating rates.
NZ floating rate notes are hedged through interest rate swaps which convert the floating rate into a fixed rate.
The forward starting interest rate swaps (floating to fixed) are to hedge future forecasted floating rate debt.
FOREIGN EXCHANGE RISK
In this reporting period the group has conducted transactions in foreign currencies for the purpose of protecting the NZ$ value of capital expenditure.
At balance date the group has no significant exposure to foreign currency risk.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 155
Gazette.govt.nz —
NZ Gazette 2006, No 155
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Vector Limited Financial Statements for the Electricity Lines Business
(continued from previous page)
🏭 Trade, Customs & Industry28 November 2006
Vector Limited, Financial Statements, Electricity Lines Business, Financial Instruments, Interest Rate Swaps, Cross Currency Swaps, Foreign Exchange Risk