Financial Markets

Borrowings

NTTC manages the Territory's exposure to funding risk by ensuring the Territory Government is not exposed to a significant refinancing risk in any financial year.

NTTC's approach to minimising funding risk involves the diversification of borrowing and investment activities across the maturity spectrum and utilising a variety of funding sources to meet NTTC's requirements.

Private Placements and Public Issues

Private placements are used by NTTC to satisfy specific funding needs. This is an alternative to the main semi-government bond market, which is made up of large issues of homogenous debt issued by the central financing authorities of each state.

Private placements are attractive because of the ease of issuance, which makes them suitable for small parcels of debt and their flexibility for tailoring to domestic market movements and investor demand.

In recent years, NTTC has developed a major class of bond issues across a number of years with a minimum balance of $500 million on issue. These issues have been established to meet investor demand for greater liquidity and to promote market awareness.

NTTC currently has six institutional bond issues:

Maturity Date ​Coupon ​Amount on issue
​17 November 2017 ​4.75% ​A$500 million
​20 September 2018 ​4.75% ​A$500 million
20 September 2021​ 4.25%​ A$650 million​
​15 March 2024 6.00%​ A$650 million​
​21 October 2024 ​2.75% ​A$500 million
15 March 2026​ 6.00%​ A$650 million​​

Promissory Notes

NTTC's short-term funding requirements are met through its promissory note facility. The notes are issued by way of tender, using ASX (Austraclear Services Limited) as the issuing, lodging, recording and paying agent.

Territory Bonds

Territory Bonds is NTTC's retail fixed interest borrowing product and is used to attract funds from the general public. Territory Bonds have been issued since 1979 and are offered to investors seeking a safe, secure, government-guaranteed investment.

As at 30 June 2016, total outstanding Territory Bonds on issue was approximately $91 million. 

 



 

Debt Profile

NTTC borrows funds from the domestic and international financial markets by offering a range of financial products. The funds raised by NTTC assist to finance the Territory’s infrastructure requirements such as housing, transport, health and education services.

As at 30 June 2016, NTTC's total outstanding debt was about A$3.8 billion of domestic debt.Total Borrowing in 2015-16 (pdf, 141kb) was A$33 million.

Credit Rating

Effective 3 August 2016, NTTC is rated Aa2 by Moody’s Investors Services with a stable outlook.

Government Guarantee

All obligations incurred or assumed by NTTC are guaranteed by the Treasurer on behalf of the Territory under section 20 of the Northern Territory Treasury Corporation Act. 

Interest Withholding Tax on NTTC Domestic Bonds

On 9 December 2008, amendments to s.128F of the Income Tax Assessment Act 1936 (ITAA 1936) came into effect to allow bonds issued in Australia by state and territory central borrowing authorities to be eligible for exemption from interest withholding tax (IWT).

The amendments apply to interest/coupon payments made on or after 9 December 2008, which means all domestic bonds, whether issued before or after that date, are eligible. The amendments do not necessarily exempt all bonds currently on issue, rather only those securities that otherwise meet the requirements of s.128F, specifically the public offer test.

In order to assist Australian custodians and paying agents holding bonds on behalf of offshore counterparties, NTTC wishes to make the following clarifications.

NTTC Domestic Bonds which qualify under s.128F

NTTC considers the following select lines of stock satisfy the relevant requirements of s.128F and are therefore exempt from IWT:

 
Maturity Date Coupon Coupon Dates Austraclear Series ID ISIN Number
17 Nov 2017 4.75% 17 May and 17 Nov NT2766 AU3SG0000342
20 Sep 2018 4.75% 20 Mar and 20 Sep NT2768 AU3SG0000383
20 Sep 2021​ 4.25%​ 20 Mar and 20 Sep​ NT2769​ AU3SG0001183​
​15 March 2024 6.00%​ 15 Sep and 15 Mar​ NT2743​ AU000NT27436​
​21 October 2024 ​2.75% ​21 Apr and 21 Oct ​NT2770 ​AU3SG0001597
15 March 2026​​ 6.00%​ 15 Sep and 15 Mar​​ NT2741​ AU000NT27410​​

Other NTTC Domestic Bonds

NTTC has a number of smaller issues of domestic bonds outstanding that are not part of its domestic select lines of stock. NTTC cannot at this stage make any definitive statements regarding eligibility of these securities for the IWT exemption. Any domestic custodians holding such stock on behalf of offshore parties should contact NTTC on a case-by-case basis to clarify IWT status of these securities.