Benchmark Bonds Introduction

Introduction
Benchmark Bonds
Global Exchangeable Bonds
Information Memorandum
Market Support
Latest Information Available

Introduction

TCorp was the first Australian state central financing authority to consolidate its domestic bond issues into a benchmark series, commencing in January 1985.

Benchmark Bonds

Benchmark Bonds are continuously issued with the same maturity date and coupon date. These bonds continue to be issued regardless of changes in market yields, so that they remain a benchmark through to maturity. The total amount of domestic benchmarks on issue will vary, but will average between $14 billion and $16 billion over time, based on current and projected client funding requirements.

Global Exchangeable Bonds

For offshore investors, there is a withholding tax exempt (subject to certain criteria being met - see Information Memorandum) version of the benchmark, the “Global Exchangeable” bond, with volumes on issue ranging between $3 billion and $5 billion.

TCorp sells Global Exchangeable Bonds through panel members who not only have intimate knowledge of the Australian bond market but also have strong international placement and dealing capacity.

TCorp pioneered the Exchangeable Bond concept in Australia with a prototype private placement in 1987. This was followed in 1989 with a series of offshore A$ bond issues. These issues are free of Australian interest-withholding tax, (see above) and are exchangeable at the investor’s option into TCorp’s domestic Australian Benchmark issues with corresponding maturity dates and semi-annual interest coupons.

The ‘Exchangeable’ feature gives offshore investors a ‘last resort’ access to the liquidity of TCorp’s domestic Australian market which they would not obtain through traditional offshore issues.

The Global Exchangeable Bond program is designed:

• to provide the same coupon and maturity as domestic bonds,
• to use panel members with domestic market making and hedging capacity, and
• to make the Exchangeables continuously available so that buy and sell prices can always be made,

so that the prices of Exchangeable Bonds will closely reflect the domestic TCorp bond market. Thus investors who wish to liquidate holdings of Exchangeables are unlikely to need to utilise the exchangeable feature, but it is a useful fall-back. All this provides a stable pricing relationship with the domestic bonds.

Information Memorandum

The Information Memorandum contains the program’s terms and conditions. The full memorandum is available from panel members or TCorp. See Program Summaries for a summary of the memorandum.

Market Support

TCorp is committed to the continual support of its issued securities and provides stocklending and clearing facilities to panel members for small or odd-size parcels. As a result dealers can be confident of dealing in large or small volumes.

All TCorp bonds are guaranteed by the Government of New South Wales. Thus Domestic Benchmark and Global Exchangeable Bonds carry the top credit ratings of AAA from Standard & Poor’s and Aaa from Moody’s Investor Service.

Latest Information Available

Information regarding amounts on issue, turnover, and closing rates for TCorp stock is regularly updated and available on:

• Bridge (22868-72)
• Reuters (TCOR-W) information pages
• Bloomberg (NSWT1-6)

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