TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

NOTES TO THE FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2007

12 LONG TERM DEBT

The following loan arrangements included within long term debt have a face value as follows:

Bonds | 250,000 | 350,000
Euro Medium Term Notes | 418,901 | 271,047
US Private Placement | 164,474 | 164,474
Structured financing transaction liability | 726,271 | 732,700
| 1,559,646 | 1,518,221
Less unamortised discount | (11,447) | (11,531)
| 1,548,199 | 1,506,690
Less current portion of long term debt | (726,271) | (105,648)
| 832,228 | 1,411,042

Between one to two years | 163,574 | 732,700
Between two to five years | 359,691 | 265,536
Greater than five years | 317,963 | 412,806
| 832,228 | 1,411,042

Long term debt | 832,228 | 1,411,042
Add debt allocated to from non-lines businesses* | 17,159 | 11,496
Total Long Term Debt | 849,387 | 1,422,538

*These financial statements have been prepared by adjusting the Transpower Group financial statements for non lines business items included in those financial statements.

The nature of security provided against amounts borrowed is as follows.

Bonds

Bonds are issued under a trust deed dated 6 April 1995 between Transpower, the Initial Guaranteeing Subsidiaries (including Transpower Finance Limited) and The New Zealand Guardian Trust Company Limited. The trust deed has been amended on various occasions to incorporate new subsidiaries into the Guaranteeing Group.

Pursuant to the trust deed, Transpower and its follow subsidiaries excluding Risk Reinsurance Limited, Benmore Finance and Bunnythorpe Holdings (the "Guaranteeing Group") have given a negative pledge that while any of the stock issued under the trust deed remains outstanding they will not, subject to certain exceptions, create or permit to exist any charge or lien over any of their respective assets.

Each member of the Guaranteeing Group has guaranteed all amounts payable on redemption or repayment of the Bonds and the payment of interest during the term of the Bonds.

Euro Medium Term Notes

Under the Euro Medium Term Note programme Transpower Finance Limited may from time to time issue notes guaranteed by Transpower. The aggregate principal amount of the notes outstanding will not at any time exceed US$1,000,000,000 (NZ$1,293,630,000) as at June 2007. US$1,000,000,000 (NZ$1,636,929,000) as at 30 June 2006 or equivalent in other currencies. The Guarantor (Transpower) and Transpower Finance Limited have given a negative pledge and guarantee payment of all principal and interest amounts.

Australian Medium Term Notes

Under the Australian Medium Term Note programme, Transpower Finance Limited may issue notes guaranteed by Transpower New Zealand Limited. The aggregate principal amount of the notes outstanding may not exceed AUD750,000,000 (NZ$827,003,000). There were no Australian Medium Term notes outstanding as at 30 June 2007 (2006: nil).

US Private Placement

US Bonds are issued by Transpower Finance Limited under a Note and Guarantor Agreement dated 27 September 2004. The bonds are guaranteed by Transpower (the "Guarantor"). Fighting Bay Finance Limited, Haywards Limited, Oteranga Bay Limited, Omaka Training Limited, Energy Market Services Limited, Arataki Holdings Limited, HVDC Finance Limited and TB and T Limited (the "Subsidiary Guarantors"). The Guarantor and Subsidiary Guarantors have unconditionally guaranteed payment of the principal, interest and other amounts owing under the Agreement.