✨ Financial Instruments and Risks
NEW ZEALAND GAZETTE, No. 186
28 NOVEMBER 2008
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
The notional gross contract amounts of cross currency interest rate swaps outstanding at balance date, by maturity banding, are:
| LINES BUSINESS | |
|---|---|
| 2008 | |
| $'000 | |
| Within one year | 13,406 |
| One to two years | - |
| Two to five years | 27,803 |
| Greater than five years | (9,152) |
| Total cross currency interest rate swaps | 32,075 |
Forward rate agreements
Forward rate agreements are used to fix interest rates on the underlying debt for periods commencing in the future. In the normal course of business the Lines Business enters into forward rate agreements to fix interest rates on floating rate debt for intervals of three months.
The notional contract amounts of forward rate agreements outstanding as at 30 June 2008 was nil (2007: nil).
Interest rate options
The Lines Business enters into interest rate options to manage interest rate re-pricing risk. The Lines Business purchases interest rate options to manage the impact on finance costs arising from floating rate debt if interest rates were to rise in the future. In the normal course of interest rate management, the sale of interest rate options is restricted by the requirement to simultaneously purchase an interest rate option.
The notional contract amounts of interest rate options outstanding at balance date, by maturity banding, are:
| LINES BUSINESS | |
|---|---|
| 2008 | |
| $'000 | |
| Within one year | - |
| One to two years | 100,000 |
| Two to five years | - |
| Greater than five years | - |
| Total interest rate options | 100,000 |
Foreign exchange forward contracts
The Lines Business uses foreign exchange forward contracts to fix the New Zealand dollar cost of foreign denominated capital equipment and stock purchases.
The notional gross contract amounts of forward foreign exchange contracts outstanding at balance date, by maturity banding, are:
| LINES BUSINESS | |
|---|---|
| 2008 | |
| $'000 | |
| Within one year | 19,310 |
| One to two years | 35,493 |
| Two to five years | - |
| Greater than five years | - |
| Total forward foreign exchange contracts | 54,803 |
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NZ Gazette 2008, No 186
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Financial Instruments and Risks for Transpower Lines Business
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🏭 Trade, Customs & IndustryFinancial Risks, Interest Rate Risk, Currency Risk, Credit Risk, Liquidity Risk, Financial Instruments