TCorp finances NSW public authorities and the Government’s Budget within strict limits which are approved by the Treasurer and the Governor of New South Wales under provisions laid down in the Public Authorities (Financial Arrangements) Act, 1987. The borrowing requirements for the Government Budget and public authorities are finalised at Budget time for the upcoming financial year.

Borrowing Requirements

In any one year TCorp’s borrowing requirement can be made up of three components. The largest component of the gross borrowing requirement is the refinancing of maturing TCorp bonds on issue. TCorp may also in some circumstances refinance Commonwealth Government Securities previously issued on behalf of the State of NSW by the Commonwealth Government. Additionally, TCorp has a new borrowing component that represents the funding requirements of the State Government’s Budget and any other public authorities. In 1998/99 additional borrowing was required following a decision by the Government to fund certain superannuation liabilities.

TCorp’s Market Activities

In accordance with managing its balance sheet of financial assets and liabilities, TCorp is active in the markets for its own securities, transacting daily through its dealer group. Three factors determine this activity:

the need to periodically reposition the debt mix
the response to dealer panel approaches for issuance, repurchase or switching
the response to client authorities' decisions to re-shape their debt profiles

As a result of this regular activity, gross issuance is a far less meaningful measure than the net funding requirement.

Recent and Current Funding Requirements

TCorp’s recent and current funding requirements are as follows:

2005/06
$bn

2006/07
$bn

2007/08
$bn

Net Maturities
7.5

1.4

6.5

Client Net Funding
2.0
2.0

6.4

Pre Funding of Maturities
(3.0)
(0.5)

(2.5)

TCorp Net Funding Requirement

6.5

2.9

10.4

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