25 NOVEMBER 2013 NEW ZEALAND GAZETTE, No. 155 4361

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

Pursuant to the Trust Deed, Transpower and its subsidiaries excluding RRL (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.

Bonds - issued by Transpower New Zealand Limited

Transpower has issued bonds which remain outstanding under a master trust deed dated 18 March 2011 between Transpower and The New Zealand Guardian Trust Company Limited, as amended from time to time (Master Trust Deed), and a supplemental trust deed (no. 1) dated 17 November 2011 between Transpower and The New Zealand Guardian Trust Limited.

Pursuant to the Master Trust Deed, Transpower has given a negative pledge that while any unsubordinated notes are outstanding it will not (and its subsidiaries will not), subject to certain exceptions, create or permit to subsist any charge or lien over any of their respective assets to secure payment of debt securities.

Euro medium term notes

Under the euro medium term note (EMTN) programme, Transpower Finance has previously issued notes guaranteed by Transpower. Transpower New Zealand rather than Transpower Finance, now issues notes under this program. Transpower New Zealand Limited has given a negative pledge covenant that while any of the notes issued under the EMTN programme remain outstanding it will not (and its subsidiaries will not), subject to certain exceptions, create or permit to exist any charge or lien over any of its respective assets to secure payment of certain indebtedness.

Australian medium term notes

Under the Australian medium term note programme, Transpower may issue notes. There were no notes issued at balance date (2012: none).

US private placements - issued by Transpower Finance Limited

Bonds are issued by Transpower Finance under a note and guarantee agreement dated 27 September 2004. The Bonds are guaranteed by Transpower (the "Guarantor"), Halfway Bush 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.

US private placements - issued by Transpower New Zealand Limited

Notes ("Transpower USPP Notes") have been issued by Transpower under a note purchase agreement dated 13 October 2011. The Transpower USPP Notes are guaranteed by Transpower Finance, Halfway Bush and TB and T (together, "Subsidiary Guarantors"). Each Subsidiary Guarantor has unconditionally guaranteed payment of the principal, interest and other amounts owing under the note purchase agreement for the Transpower USPP Notes.

(iii) Economic gain (loss) account

Transpower operates its revenue setting methodology within an economic value ("EV") framework that analyses economic gains and losses between those attributable to shareholders and those attributable to customers. Under Commerce Commission regulations, Transpower is required to pass onto or claim from customers the economic value of the net balance of any historical gains or losses incurred prior to 30 June 2012. In addition to the historical balances, further economic gains or losses arising are required to be passed on or claimed from customers in the following pricing year.