Advisory and Other Services

Corporate Finance’s focus is on ensuring value for money, maximising the financial results achievable within acceptable risk parameters.

Corporate Finance

TCorp’s Corporate Finance unit is a dedicated team that advises NSW Treasury and other public sector agencies on asset procurement financing and structured finance transactions. Corporate Finance’s focus is on ensuring value for money, maximising the financial results achievable within acceptable risk parameters.

The unit has experience advising on a wide range of asset types including:

• information technology and telecommunications equipment
• photocopiers and imaging devices
• social housing
• schools
• hospitals
• medical equipment
• other infrastructure assets
• rolling stock
• car parks
• motor vehicles
• toll roads
• other transport equipment
• electricity generation plant.

TCorp’s work includes:

• providing general commercial advice and assistance, such as the review or preparation of financial or commercial reports and submissions including financial modelling, and database creation and extraction of asset and financing information, covering new and existing structured finance transactions;
• assessing potential financing structures for asset acquisitions or new projects;
• participating in and advising on the financial assessment of private sector tender bids, including public private partnership (PPP) projects, and identifying and managing associated financial and other risks;
• being involved in the financial close of transactions including independent attestation of market rates;
• undertaking ongoing management of financing transactions;
• monitoring potential cross-border transactions and implementation where required; and
• maintaining contact with private sector participants and intermediaries.

Much of the work involves assessment of funding options from different private sector providers and a comparison of external financing options with a public sector funding alternative. In performing this work, the Corporate Finance unit is able to draw on the financial markets expertise of TCorp’s Treasury unit.

During the year, TCorp continued its active involvement in PPP projects in NSW. New projects in which TCorp worked as part of the assessment team included:

• RailCorp’s new rolling stock;
• the Bonnyrigg social housing redevelopment;
• Orange Hospital and associated health services; and
• the Royal North Shore Hospital redevelopment.

TCorp works with NSW Treasury in developing and reviewing policy in the PPP area and is involved in monitoring and managing interest rate exposures arising from PPP transactions.

Other significant assignments during the year included:

• assisting NSW Treasury with its review of business cases submitted for new peak electricity generation capacity;
• working with NSW Health and NSW Treasury on a review of medical equipment leasing and funding requirements for this equipment;
• undertaking financial capability assessments of tenderers to supply contracts for the Department of Commerce;
• providing financial modelling and financial assessment of the Liverpool Hospital car park project for NSW Health;
• assessing of the financial capability of the preferred bidder for the Airport Rail Link assets for RailCorp;
• continuing assistance to the Department of Housing on managing existing financing arrangements for social housing; and
• managing of financing arrangements for the budget sector agencies motor vehicle fleet, in conjunction with StateFleet.

Advisory Services

In addition to its role as discretionary debt or asset manager for the NSW Government and many State Government businesses (which involves provision of advice on matters such as policies and benchmarks), TCorp also provides portfolio management advice to a small number of other clients who prefer not to use the discretionary management service. This may entail regular advice, such as recommendations on refinancing of maturing loans or one-off projects. During the year, projects included two major debt benchmarking studies, one of which concentrated on the impact of the regulatory regime on the appropriate debt structure for the client.

TCorp’s economic team provides regular presentations to debt and asset management clients, as well as emailing a weekly economic and markets brief and providing input to clients’ monthly portfolio management reports.

Guarantees

Some Government businesses require performance guarantees in the course of their operations. TCorp can provide this back up, supported by NSW Treasury. The largest example of this activity is the substantial guarantees provided to the National Electricity Market Management Company on behalf of the State owned electricity distributors.

Another major example is guarantees provided by TCorp to the WorkCover Authority on behalf of SOCs that self-insure their obligations under the Workers Compensation Act 1987. In addition, TCorp provides performance guarantees for other purposes for a small number of agencies.

Although a relatively minor part of TCorp’s business, these guarantee activities are another aspect of TCorp’s role of providing financial accommodation to its clients.