✨ Financial Instruments Report
4188 NEW ZEALAND GAZETTE, No. 172 27 NOVEMBER 2009
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
The notional gross contract amounts of interest rate swaps outstanding at balance date, by maturity banding, are:
| LINES BUSINESS | 2009 | 2008 |
|---|---|---|
| $000 | $000 | |
| Within one year | 76,000 | 139,500 |
| One to two years | 100,000 | 70,000 |
| Two to five years | 211,500 | 266,500 |
| Greater than five years | 4354,500 | 2,782,132 |
| Total interest rate swaps | 4,742,000 | 3,258,132 |
Basis swaps are used to eliminate currency risk when the Lines Business issues bonds in a foreign currency. In a basis swap, the Lines Business receives the offshore currency floating interest rate and pays the New Zealand dollar floating interest rate (BKBM). By undertaking basis swaps, foreign currency denominated debt is effectively converted into a BKBM exposure.
The notional gross contract amounts of basis swaps outstanding at balance date, by maturity banding, are:
| LINES BUSINESS | 2009 | 2008 |
|---|---|---|
| $000 | $000 | |
| Within one year | - | - |
| One to two years | - | - |
| Two to five years | 25,000 | - |
| Greater than five years | - | - |
| Total basis swaps | 25,000 | - |
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 | 2009 | 2008 |
|---|---|---|
| $000 | $000 | |
| Within one year | - | - |
| One to two years | - | - |
| Two to five years | - | - |
| Greater than five years | 100,000 | 100,000 |
| Total interest rate options | 100,000 | 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 | 2009 | 2008 |
|---|---|---|
| $000 | $000 | |
| Within one year | 55,297 | 19,310 |
| One to two years | - | 35,493 |
| Two to five years | - | - |
| Greater than five years | - | - |
| Total forward foreign exchange contracts | 55,297 | 54,803 |
Next Page →
NZ Gazette 2009, No 172
✨ LLM interpretation of page content
🏢
Financial Instruments and Risks for Transpower New Zealand Limited Lines Business
(continued from previous page)
🏢 State Enterprises & InsuranceFinancial Risks, Interest Rate Risk, Currency Risk, Credit Risk, Liquidity Risk, Financial Instruments, Interest Rate Swaps, Basis Swaps, Interest Rate Options, Foreign Exchange Forward Contracts