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Abolition of Interest Withholding Tax

Abolition of IWT

Release date:02 Dec 2008


New South Wales Treasury Corporation (TCORP) welcomes abolition of Interest Withholding Tax (IWT) for domestically issued Semi-Government Bonds.
On 1 December 2008 the legislative changes to IWT, which mean that domestic bonds issued by TCorp are eligible for IWT exemption to all investors, were passed by the Australian Parliament. Once the legislation receives Royal Assent, a process that usually takes 7 – 10 working days, all coupon payments on TCorp domestic bonds, both existing and future issues, will be IWT exempt.
Consistent with our release on 20 May 2008 TCorp announces the following response to the legislative changes.
 
  1. TCorp will continue to maintain its existing Domestic and Exchangeable Benchmark bond programmes.
  2. TCorp will move its buyback levels for Exchangeables from flat to Domestics to -1, until 30 June 2009.
  3. TCorp will continue to offer Exchangeables at -2 to Domestics. This will also be reviewed at 30 June 2009.
 
These changes will assist TCorp in further enhancing the liquidity of its benchmark bond programme. Concentrating new issuance of Benchmark bonds into the existing Domestic series will enable TCorp greater flexibility in meeting the changing investor dynamics, particularly for those investors who were previously constrained from investing in domestically issued bonds. The change will also broaden the potential investor base for the existing Capital Indexed bond programme which has not been offered to investors as an Exchangeable bond.
 
TCorp has always published weekly outstandings on both our Domestic and Exchangeable bond programmes. These are available on Bloomberg pages NSWT3 & NSWT4 and Reuters pages TCOS & TCOU. Outstandings data can also be requested at other times if required.
 
TCorp welcomes all feedback from market participants regarding these changes.
 
  
Outstandings (face value) of TCorp’s Benchmark bond programme as at 1 December 2008 are as follows:
 
Series
Domestic Benchmarks
$m
Exchangeable Bonds
$m
Total
$m
6.00% 1 Oct   2009
1,819.8
818.0
2,637.8
7.00% 1 Dec 2010
3,598.0
3,667.9
7,265.9
6.00% 1 May 2012
2,944.8
4,283.2
7,228.0
5.50% 1 Aug 2014
3,728.4
2,131.9
5,860.3
5.50% 1 Mar 2017
2,789.6
4,144.3
6,933.9
6.00% 1 Apr  2019
1,541.9
154.3
1,696.2
 
16,422.5
15,199.6
31,622.10

For further information please contact: Michael Allen, General Manager Treasury on (02) 9325 9288.

 
Last Updated : 02 December 2008
© 2003 - 2009 New South Wales Treasury Corporation

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