✨ Financial Statements
2 NOVEMBER 2012
NEW ZEALAND GAZETTE, No. 132
3807
Notices in Forming Part of the Financial statements
For the year ended 31 March 2012
GAS DIVISION
d) Commercial bank debt
| 31 March 2012 NZ$000 | 30 June 2011 NZ$000 | |
|---|---|---|
| Revolving cash facility | 11,645 | 32,576 |
| Debenture funding costs | (137) | (231) |
| 11,508 | 32,345 | |
| Working capital facility | 6,039 | 4,539 |
| Accrued interest | 90 | 404 |
| 6,129 | 4,943 | |
| Current portion | 16,549 | 37,284 |
| Non current portion | — | 4 |
| Total | 16,549 | 37,288 |
The Company had a $125 million Revolving Cash Advance facility provided jointly and in equal proportion by ANZ National Bank and Westpac New Zealand Limited. The facility was due to mature on 30 September 2012. On 19 September 2011, the facility was renewed for a further five years, with a maturity date of 30 September 2016.
At balance date, the Company had $1 tranche (Tranche B) for $700 million, was entered in December 2010 and matures on December 2015. At balance date, tranche B was drawn by $56 million with an applicable rate of 5.92% (2011: 3.84%).
At balance date, the Company had a facility of $25 million, with a maturity date of 21 September 2012, however on 30 April 2012 this was replaced with a $100 million Tranche, due to mature on 1 April 2017. Also on 16 April 2012, a $55 million Commercial Paper Facility was replaced with Bank of Tokyo-Mitsubishi UFJ Limited. This facility is due to mature on 13 April 2013. The total of $155 million of new facilities agreed in April 2012 refinances the maturing bank facility ($25 million) and bond ($130 million) as September 2012.
The Company operates a Working Capital Advance facility with the Commonwealth Bank of Australia for up to $30 million. The facility is based on a revolving credit arrangement and as such, does not have set repayment dates. The facility has an interest rate during the period of 3.35% (30 June 2011: range of 2.75% to 3.35%).
e) Covenants
Powerco has covenanted with all counterparties to ensure certain financial criteria are met throughout the term of the debt agreements. These covenants include minimum Interest Coverage Ratios, minimum Net Worth values and maximum Gearing or Leverage ratios. Covenants also include various comparisons of the Guaranteeing Group earnings and assets under the Security Trust Deed to earnings and assets of the Total Group.
There have been no covenant breaches.
f) Financial assets and liabilities
The following tables detail the fair value of financial liabilities:
| Financial assets/(liabilities) | 31 March 2012 Carrying Amount NZ$000 | 31 March 2012 Fair Value NZ$000 | 30 June 2011 Carrying Amount NZ$000 | 30 June 2011 Fair Value NZ$000 |
|---|---|---|---|---|
| Financial assets: | ||||
| Current rate swap | 1,718 | 1,718 | 1,611 | 1,811 |
| US cross currency interest rate swap | 3,272 | 3,272 | — | — |
| 4,990 | 4,990 | 1,611 | 1,811 | |
| Financial liabilities: | ||||
| Guaranteed bonds | 70,534 | 70,320 | 70,632 | 70,222 |
| Who esale bonds | 21,180 | 21,180 | — | — |
| US dollar private placement notes | 119,272 | 119,272 | 111,787 | 111,787 |
| Commercial bank debt and working capital advance | 16,649 | 16,649 | 37,689 | 37,569 |
| Interest rate swap liabilities | 15,468 | 15,468 | 13,919 | 13,919 |
| Foreign exchange contracts | 3 | 3 | 12 | 12 |
| 253,423 | 253,210 | 250,738 | 250,354 |
The fair value of financial assets and financial liabilities are determined as follows:
- The fair floating rate debt carrying value approximates fair value due to continuing interest rate reset;
- For fixed rate debt, opening floating rate derivative instruments matching tenor and term are used in offset position to calculate fair values. The movements in these derivatives approximate movements in market values; and
- The fair value of interest rate swaps and cross currency rate debt are determined by reference to the market quoted interest rates input into valuation models.
The valuation method takes into account the interest rate curve and foreign exchange rates by calculating the discounted future cash flows on derivatives as at the reporting date. The method assumes a content credit rating of all parties to the swap. The market rates used at the reporting date are as follows:
| Reporting date interest rates | 31 March 2012 | 30 June 2011 |
|---|---|---|
| NZ 1 year swap rate | 2.81% | 3.01% |
| NZ 2 year swap rate | 3.04% | 3.77% |
| NZ 3 year swap rate | 3.27% | 4.06% |
| NZ 4 year swap rate | 3.51% | 4.25% |
| NZ 5 year swap rate | 3.70% | 4.39% |
| NZ 7 year swap rate | 4.03% | 4.55% |
| NZ 10 year swap rate | 4.44% | 5.17% |
| NZD/USD rate | 0.8188 | 0.8232 |
| US 1 year swap rate | 0.48% | 0.33% |
| US 2 year swap rate | 0.66% | 0.75% |
| US 3 year swap rate | 0.75% | 1.15% |
| US 4 year swap rate | 1.05% | 1.60% |
| US 5 year swap rate | 1.38% | 2.03% |
| US 7 year swap rate | 1.94% | 2.59% |
| US 10 year swap rate | 2.28% | 3.28% |
| US 30 year swap rate | 3.04% | 4.07% |
The rates above are from Bloomberg.
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NZ Gazette 2012, No 132
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Powerco Gas Division Financial Statements
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