OFFERING CIRCULAR (replacing the offering circular dated 18th December, 2009)
22nd December, 2010
New South Wales Treasury Corporation (a statutory corporation constituted by the Treasury Corporation Act 1983 of New South Wales)
A$18,000,000,000 Global Exchangeable Bond Programme for the issue of guaranteed global exchangeable bonds exchangeable into New South Wales Treasury Corporation Inscribed Stock
payment of principal and interest guaranteed by The Crown in Right of New South Wales
Arranged by UBS Investment Bank Panel Members Australia and New Zealand Banking Group Limited Citi Commonwealth Bank of Australia Deutsche Bank National Australia Bank Limited RBC Capital Markets TD Securities The Royal Bank of Scotland UBS Investment Bank Westpac Banking Corporation This document replaces the Offering Circular in relation to the Programme dated 18th December, 2009.
This Offering Circular comprises Listing Particulars and is issued in compliance with the listing rules made under Section 79(2) of the Financial Services and Markets Act 2000 (the “FSMA”) by the UK Listing Authority (as defined below) for the purpose of giving information with regard to New South Wales Treasury Corporation (the “Issuer” or the “Corporation”), The Crown in Right of New South Wales (the “Guarantor”), the fixed rate guaranteed global exchangeable bonds (the “Bonds”) to be issued from time to time pursuant to the Facility Agreement (as defined under “Description of the Programme and the Inscribed Stock”), the domestic Inscribed Stock (the “Inscribed Stock”) into which the Bonds are exchangeable and the programme (the “Programme”) for the issue of the Bonds which is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Issuer and the Guarantor. The Issuer and the Guarantor (only in relation to information relating to itself and the Guarantee (as defined under “Terms and Conditions of the Bonds”)) accept responsibility for the information contained in this document (the “Responsible Persons”). To the best of the knowledge and belief of the Responsible Persons (each of which has taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
This document is to be read in conjunction with all documents which are deemed to be incorporated herein by reference (see “Documents Incorporated by Reference” on page 11).
Application has been made to the Financial Services Authority in its capacity as competent authority under the FSMA (the “UK Listing Authority”) for Bonds issued under the Programme for the period of 12 months from that date of this Offering Circular to be admitted to the official list of the UK Listing Authority (the “Official List”) and to the London Stock Exchange plc (the “London Stock Exchange”) for such Bonds to be admitted to trading on the London Stock Exchange’s Professional Securities Market (the “Market”). References in this Offering Circular to Bonds being “listed” (and all related references) shall mean that such Bonds have been admitted to trading on the Market and have been admitted to the Official List. The Market is not a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments. Bonds may be issued pursuant to the Programme which will not be listed on the Official List and admitted to trading on the Market or any other stock exchange. The relevant final terms (the “Final Terms”) in respect of the issue of any Bonds will specify whether or not such Bonds will be listed on the Official List and admitted to trading on the Market or any other stock exchange.
No person has been authorised to give any information or to make any representations other than those contained in this document in connection with the offering of the Bonds, and, if given or made, such information or representations must not be relied upon as having been authorised by the Issuer, the Guarantor, UBS Limited as arranger (the “Arranger”) or any of the Panel Members named under “Subscription and Sale” (the “Panel Members”). Neither the delivery of this document nor any offer or sale of the Bonds shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor since the date hereof or the date upon which this document has been most recently amended or supplemented or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.
The Bonds and Inscribed Stock have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and include Bonds in bearer form that are subject to U.S. tax law requirements. Bonds in registered form and Inscribed Stock received in exchange therefor may be sold in the United States to qualified institutional buyers pursuant to Rule 144A (“Rule 144A”) under the Securities Act. Save as aforesaid and subject to certain exceptions, Bonds and Inscribed Stock known to have been received in exchange therefor may not be offered, sold or delivered within the United States or to U.S. persons.
This document does not constitute an offer or invitation to subscribe or purchase any of the Bonds or a recommendation or a statement of opinion (or a report of either of those things). The distribution of this document and the offering for sale of the Bonds may, in certain jurisdictions, be restricted by law; persons into whose possession this document comes are required by the Issuer, the Guarantor, the Arranger and the Panel Members to inform themselves of and observe all such restrictions.
This document may not be used for or in connection with an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. See “Subscription and Sale” on page 61.
To the fullest extent permitted by law, none of the Panel Members or the Arranger accept any responsibility for the contents of this Offering Circular or for any other statement, made or purported to be made by the Arranger or a Dealer or on its behalf in connection with the Issuer, the Guarantor, or the issue and offering of the Bonds. The Arranger and each Dealer accordingly disclaims all and any liability whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this Prospectus or any such statement.
Each potential purchaser of Bonds should determine for itself the relevance of the information contained in this document, the supplements hereto (if any) and the Final Terms and its purchase of Bonds should be based upon such investigation as it deems necessary. None of the Arranger or the Panel Members undertakes to review the financial condition or affairs of the Issuer or the Guarantor during the life of this Programme or any Bonds issued pursuant to it nor to advise any investor or potential investor in the Bonds of any information coming to the attention of the Arranger or any of the Panel Members.
All references herein to “dollars” or “A$” are to the currency of the Commonwealth of Australia.
In connection with the issue of any tranche of Bonds, the Panel Member or Panel Members (if any) named as the stabilising manager(s) (the “Stabilising Manager(s)”) (or persons acting on behalf of any Stabilising Manager(s)) in the applicable Final Terms may (outside Australia and not on a market operated in Australia) over-allot Bonds or effect transactions with a view to supporting the market price of the Bonds at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or persons acting on behalf of a Stabilising Manager) will undertake stabilisation action. Such stabilisation, if begun, may be ended at any time, but it must end after a limited period. Such stabilisation shall be in compliance with all applicable laws, regulations and rules.
In relation to each separate issue of Bonds, the final offer price and the amount of such Bonds will be determined by the Issuer and the relevant Panel Members in accordance with prevailing market conditions at the time of the issue of the Bonds and will be set out in the relevant Final Terms.
See “Risk Factors” beginning on page 7 for a discussion of certain factors to be considered in connection with an investment in the Bonds. TABLE OF CONTENTS
Page
Overview of the Programme ...... 3
Risk Factors...... 7
Documents Incorporated by Reference ...... 11
Supplementary Listing Particulars ...... 12
Use of Proceeds...... 13
New South Wales Treasury Corporation ...... 14
The Crown in Right of New South Wales ...... 16
Description of the Programme and the Inscribed Stock ...... 29
Terms and Conditions of the Bonds ...... 31
Special Provisions Relating to Global Bonds...... 49
Transfer and Settlement of Interests in Global Bonds...... 54
Taxation and Approvals...... 56
Subscription and Sale...... 61
Form of Final Terms...... 64
General Information ...... 70
2 OVERVIEW OF THE PROGRAMME
This summary must be read as an introduction to this Offering Circular and any decision to invest in the Bonds should be based on a consideration of the Offering Circular as a whole, including the documents incorporated by reference. The following summary is qualified in its entirety by the terms and conditions of the Bonds and details of the Programme appearing elsewhere in this document. Issuer: New South Wales Treasury Corporation (the “Issuer” or the “Corporation”) was established in June 1983 under the provisions of the Treasury Corporation Act 1983 of New South Wales (the “TCA”). The TCA states the objects and purposes of the Issuer. The Issuer is the central financing agency for the government and for all public authorities within the provisions of the Public Authorities (Financial Arrangements) Act 1987 of New South Wales (the “PAFA Act”). These are predominantly semi-governmental authorities involved in productive activities including electricity generation, water supply, rail and road transport and highway construction. Local government authorities may borrow through the Issuer if they so desire. The Issuer is empowered to enter into all forms of financial accommodation, and funds borrowed by the Issuer are lent to the relevant public authorities or the government. Funds raised by the Issuer are invested by it pending advances to such borrowers. The Issuer also provides liability and asset management services for authorities and the government. Commonwealth Guarantee: The Issuer may issue Bonds pursuant to the Programme, which will be guaranteed by the Commonwealth of Australia (the “Commonwealth Guarantee”). Full details of the Commonwealth Guarantee can be found in the Description of the Commonwealth and the Commonwealth Guarantee of State and Territory Borrowing which is incorporated by reference in this Offering Circular. The Commonwealth Guarantee will not apply to any Bonds issued after 31st December, 2010. Guarantor: The legal name of the Guarantor is the Crown in Right of New South Wales. New South Wales and five other British colonies became federated states under the name of the Commonwealth of Australia on 1st January, 1901. The Commonwealth of Australia was formed under the Commonwealth of Australia Constitution Act (an Act of the British Parliament). Size of Programme: A$18,000,000,000. Securities to be issued: Guaranteed global exchangeable bonds which confer on the holder an option to exchange such bonds for a like principal amount of New South Wales Treasury Corporation Inscribed Stock of identical maturity and coupon. Further information is available at http://www.tcorp.nsw.gov.au/html/fm_bb_i.cfm.
3 Maturities and Coupons of Bonds to be issued: The Programme provides for the issue of Bonds exchangeable into certain maturities of the Corporation’s Inscribed Stock (see “Description of the Programme and the Inscribed Stock”) subject to compliance with all relevant laws, regulations and directives. The maturity and coupon of these Bonds will correspond to the maturity and coupon of the Inscribed Stock into which the Bonds are exchangeable. As at the date of this Offering Circular this included the following:
6.0 per cent. Inscribed Stock due 1st May, 2012 5.5 per cent. Inscribed Stock due 1st August, 2014 5.5 per cent. Inscribed Stock due 1st March, 2017 6.0 per cent. Inscribed Stock due 1st April, 2019 The Inscribed Stock may comprise any Inscribed Stock in issue at the date of this document or any Inscribed Stock issued in the future. Interest: Interest will accrue at the rate per annum corresponding to the rate payable on the Inscribed Stock into which the Bonds are exchangeable and will be payable semi-annually in arrear on the same dates as interest is payable on such Inscribed Stock. Issue price: The issue price of the Bonds will be set out in the Final Terms in respect of each issue of the Bonds. The price and amount of the Bonds to be issued under the Programme will be determined by the Issuer and the relevant Panel Member before filing of the relevant Final Terms of each Tranche based on then prevailing market conditions. Bonds will be issued plus or minus accrued interest (as applicable). Early redemption: None, other than in the event that certain changes to Australian interest withholding tax occur. Form and denomination of definitive Bonds Bonds will be issued in bearer form either in the denomination (see also “Delivery” below): of A$100,000 or in denominations of A$1,000, A$10,000 and A$100,000 and in registered form either in the denomination of A$100,000 or in denominations of A$1,000, A$10,000 and A$100,000 and multiples thereof. The Bonds will be in such denominations as may be specified in the relevant Final Terms save that the Bonds will be issued in such denominations as may be agreed between the Issuer and the relevant Panel Member and as specified in the applicable Final Terms. Unless otherwise permitted by then current laws and regulations, Bonds which have a maturity of less than one year and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of Section 19 of the Financial Services and Markets Act 2000 will have a minimum
4 denomination of £100,000 (or its equivalent in other currencies). Listing and admission to trading: Bonds issued after the date of this document may (i) be listed on the Official List and admitted to trading on the Market, (ii) be listed on another stock exchange or (iii) not be listed on any stock exchange. Pursuant to the Facility Agreement (as defined under “Terms and Conditions of the Bonds”), the Issuer has agreed that, prior to each issue of Bonds, the Fiscal Agent acting on its behalf, will seek to have such Bonds listed on the Official List and admitted to trading on the Market (unless the Issuer and the relevant Panel Member agree otherwise). Governing law: English law governs the Bonds, the Deed of Covenant, the Facility Agreement and the Fiscal Agency Agreement (as defined under “Terms and Conditions of the Bonds”) and New South Wales law governs the Guarantee (as defined below) and the Inscribed Stock. Sales of Bonds: It is intended by the Corporation that, subject to the detailed provisions of “Subscription and Sale” (see below) and applicable law, Bonds will be offered and sold, inter alios, to investors in Europe and Asia and may be sold, under certain circumstances, in registered form to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act. However, the distribution of this document and the offering of the Bonds may in certain jurisdictions be restricted by law. Persons into whose possession this document comes are required by the Issuer, the Arranger and the Panel Members to inform themselves of and observe all such restrictions. Delivery: Each issue of Bonds will initially be represented by (a) a temporary Global Bearer Bond which will be delivered to a common depositary for Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), (b) a Registered Global Bond (an “International Registered Global Bond”) which will be delivered to a common depositary for Euroclear and Clearstream, Luxembourg, (c) a Registered Global Bond (a “DTC Registered Global Bond”) which will be delivered to and registered in the name of The Depository Trust Company (“DTC”) or its nominee and/or (d) registered Bonds in definitive form (“Definitive Registered Bonds”). International Registered Global Bonds and DTC Registered Global Bonds are herein together referred to as “Global Bonds”. Bonds will normally be represented by International Registered Global Bonds or DTC Registered Global Bonds. Each temporary Global Bearer Bond will be exchangeable for definitive Bonds in bearer form as described in “Terms and
5 Conditions of the Bonds” upon certification of non-U.S. beneficial ownership. Bonds in bearer form may be exchanged for Bonds in registered form as described in “Terms and Conditions of the Bonds”. Each Global Bond will be exchangeable for definitive Bonds in registered form as described in “Special Provisions Relating to Global Bonds”. Evidence and Transfer of Bonds: Interests in the Bonds represented by a Global Bond will be evidenced only by, and transfers thereof will only be effective through, records maintained by Euroclear and Clearstream, Luxembourg (in the case of temporary Global Bearer Bonds and International Registered Global Bonds) or DTC or its participants (in the case of DTC Registered Global Bonds). Enforcement of Global Bonds: Accountholders at, or Participants in, DTC, Euroclear and Clearstream, Luxembourg will have the benefit of a Deed of Covenant dated 14th December, 2007 (the “Deed of Covenant”) made by the Issuer and enforcement of rights in respect of temporary Global Bearer Bonds, DTC Registered Global Bonds and International Registered Global Bonds will, in the circumstances specified therein, be governed by the Deed of Covenant and by the arrangements between Accountholders or Participants in Euroclear, Clearstream, Luxembourg or DTC, as the case may be. Panel Members: Australia and New Zealand Banking Group Limited (ABN 11 005 357 522), Citigroup Global Markets Limited, Commonwealth Bank of Australia (ABN 48 123 123 124), Deutsche Bank AG, London Branch, National Australia Bank Limited (ABN 12 004 044 937), Royal Bank of Canada Europe Limited, The Royal Bank of Scotland plc, The Toronto- Dominion Bank, UBS Limited and Westpac Banking Corporation (ABN 33 007 457 141). Use of Proceeds: It is anticipated that the net proceeds from the issues of the Bonds will be applied towards the financing requirements of the State of New South Wales and its public and local authorities. If in respect of any particular issue of bonds, there is a particular identified use of proceeds, this will be stated in the applicable Final Terms.
6 RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations under Bonds issued under the Programme. All of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring.
Factors which the Issuer believes may be material for the purpose of assessing the market risks associated with Bonds issued under the Programme are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in Bonds issued under the Programme, but the Issuer may be unable to pay interest, principal or other amounts on or in connection with any Bonds for other reasons and the Issuer does not represent that the statements below regarding the risks of holding any Bonds are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular(including any documents deemed to be incorporated by reference herein) and reach their own views prior to making any investment decision.
Factors relating to the Issuer
Statutory corporation The Issuer is a statutory corporation which derives its powers from the TCA. There can be no assurance that future administrations will not introduce new legislation or amend existing legislation in a way that will have a negative impact on the Issuer’s fund-raising or other activities. Any such amendment to the TCA may have an adverse effect on the ability of the Issuer to access the funding markets and make payments under the Bonds, and may affect the liquidity of Bonds currently in issue.
Enforcement of Judgments against the Issuer The Issuer is not immune from suit in the Federal Court of Australia or the Courts of New South Wales and proceedings may be taken against the Issuer in accordance with the provisions of the Crown Proceedings Act 1988 of New South Wales (the “CPA”). The Treasurer of New South Wales is required under the CPA to pay (out of any money legally available) all money payable by the Issuer under any judgment, including any interest (to the extent the same is not paid by any other person), but moneys will generally not be regarded as being legally available unless an appropriation Act has been passed. Furthermore, no execution, attachment or similar process can be issued out of any court against the Issuer or any property held by the Issuer and accordingly investors may not be able to recoup all or any part of their investment.
A downturn in the New South Wales economy could have an impact on the Issuer’s ability to fulfill its obligations under the Notes. The Issuer derives the majority of its income from interest income derived from its on-lendings to New South Wales state governmental bodies. The ability of these bodies to make principal and interest payments may be impacted by any material adverse changes in the New South Wales economy. If these bodies were unable to fulfill their obligations to make payments of principal and interest on on-lent funds, this may have an adverse impact on the Issuer’s ability to fulfill its obligations under Bonds issued under the Programme.
The Issuer may be unable to access suitable funding markets when required. If there were to be a downturn in the New South Wales or Australian economies, the most likely impact on the Issuer is that it may be unable to, or be subject to delays in accessing, appropriate funding markets. In the worst case, the Issuer may be unable to refinance significant loans or bonds becoming due.
7 Factors relating to the Guarantor
Enforcement of Judgments against the Guarantor The Guarantor is not immune from suit in the Federal Court of Australia or the Courts of New South Wales and proceedings may be taken against the Guarantor in accordance with the provisions of the CPA. The Treasurer of New South Wales is required under the CPA to pay (out of any money legally available) all money payable by the Guarantor under any judgment, including any interest (to the extent the same is not paid by any other person). No further appropriation other than the PAFA Act is required for the purposes of making moneys legally available to make payment under the Guarantee, but no execution, attachment or similar process can be issued out of any court against the Guarantor or any property held by the Guarantor and accordingly investors may not be able to recoup all or any part of their investment.
A downturn in the New South Wales or Australian economies could adversely impact the Guarantor’s ability to fulfil its obligations under the guarantee The State of New South Wales guarantees the payment of principal and interest when due on the Bonds. New South Wales relies to a large extent on personal and corporate income taxes and goods and services taxes and grants from the Commonwealth of Australia to meet its funding obligations. New South Wales’ main sources of revenue are transfers from the Commonwealth (Goods and Services Taxation revenue) and State taxation revenue. As most of these revenues are economy-based, a material adverse change in the New South Wales economy could result in decreased tax revenues. In addition, a material adverse change in the economy of Australia could affect the amount of transfer payments that New South Wales receives. Either of these events could ultimately adversely affect the ability of the Guarantor to fulfil its obligations under the Guarantee.
Guarantee Payments by the Guarantor may be delayed There is no mandatory period during which the Guarantor must make payments under the Guarantee after it receives a valid claim from a Noteholder. As a consequence, there may be circumstances where, if the Guarantor does not make the guarantee payments after it receives a valid claim, the guarantee payments on the Bonds may be delayed from the date the payment is due under the Bonds.
Factors which are material for the purpose of assessing the market risks associated with Bonds issued under the Programme
Bonds may not be a suitable investment for all investors Each potential investor in any Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:
(a) have sufficient knowledge and experience to make a meaningful evaluation of the relevant Bonds, the merits and risks of investing in the relevant Bonds and the information contained or incorporated by reference in this Offering Circular or any applicable supplement;
(b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the relevant Bonds and the impact such investment will have on its overall investment portfolio;
(c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the relevant Bonds;
(d) understand thoroughly the terms of the relevant Bonds and be familiar with the behaviour of any relevant indices and financial markets; and
8 (e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.
A potential investor should not invest in Bonds unless it has the expertise (either alone or with the help of a financial adviser) to evaluate how the Bonds will perform under changing conditions, the resulting effects on the value of such Bonds and the impact this investment will have on the potential investor’s overall investment portfolio.
Risks relating to the structure of the particular issue of Bonds
Bonds issued at a substantial discount or premium The market values of securities issued at a substantial discount or premium to their nominal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.
Risks related to Bonds generally
Change to market price Potential investors should be aware that the market price of the Bonds may be volatile and there can be no assurance that investors will not lose all or part of their investment in the Bonds.
Modification and substitution The Terms and Conditions of the Bonds contain provisions for calling meetings of Bondholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all of the Bondholders including the Bondholders who did not attend and vote at the relevant meeting and Bondholders who voted in a manner contrary to the majority. In addition there are no provisions requiring special quorums of Bondholders in any circumstances, except that any modification, inter alia, postponing the date of maturity of the Bonds or any date for payment of interest in respect thereof, or reducing or cancelling the amount of principal or the rate of interest payable in respect of the Bonds or the Coupons, will only be binding if passed at a meeting of Bondholders (or any adjournment thereof) at which a special quorum (provided for in the Amended and Restated Fiscal Agency Agreement dated 14th December, 2007 (as supplemented, amended or restated from time to time)) is present.
The Terms and Conditions of the Bonds also provide that the Issuer may, without the consent of Bondholders, be replaced as principal debtor under any Bonds by a successor statutory body, constituted by public Act of the State of New South Wales, which by the provisions of the Act by which it is constituted assumes all of the obligations of the Issuer under the Bonds so long as (i) all necessary governmental and regulatory consents and approvals have been obtained for such substitution, (ii) the interests of the Bondholders are not in any way prejudiced by such substitution and (iii) the Guarantee of the Bonds remains in full force and effect and the Bondholders remain entitled to the full benefit of the Guarantee in accordance with Section 22A(1) of the PAFA Act.
The Terms and Conditions of the Bonds are based on English law in effect as at the date of issue of the relevant Bonds. The terms of the Guarantee are in accordance with Section 22A(1) of the PAFA Act. No assurance can be given as to the impact of any possible judicial decision or change to English or, as the case may be, New South Wales law or administrative practice after the date of this Offering Circular.
9 The Guarantee The Guarantee is a statutory guarantee pursuant to the provisions of Section 22A(1) of the PAFA Act. The Guarantee is unconditional and may only be revoked by legislation passed by the Parliament of New South Wales.
However, there can be no assurance that legislation will not be enacted in the future which would have the effect of amending or revoking the Guarantee. Any such amendment or revocation may have a material adverse effect on the value of the Bonds and/or the likelihood of investors recouping their investment.
Risks related to the market generally Set out below is a brief description of certain market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk:
General Market risks Bonds may have no established trading market when issued, and one may never develop. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for Bonds that are especially sensitive to interest rate, currency or markets risks. Illiquidity may have a severely adverse effect on the market value of Bonds.
Exchange rate risks and exchange controls The Issuer will pay principal and interest on the Bonds in the Specified Currency. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the Specified Currency would decrease (1) the Investor’s Currency-equivalent yield on the Bonds, (2) the Investor’s Currency-equivalent value of the principal on the Bonds and (3) the Investor’s Currency- equivalent market value of the Bonds.
Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.
Interest rate risks Investment in Fixed Rate Bonds involves the risk that subsequent changes in market interest rates may adversely affect the value of Fixed Rate Bonds.
Legal investment considerations may restrict certain investments The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (1) the Bonds are legal investments for it, (2) the Bonds can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of any of the Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of the Bonds under any applicable risk-based capital or similar rules.
10 DOCUMENTS INCORPORATED BY REFERENCE
This Offering Circular should be read and construed in conjunction with the following documents:
the audited consolidated annual financial statements of the Issuer for the financial years ended 30th June, 2009 and 30th June, 2010 together in each case with the audit reports thereon;
the Terms and Conditions of the Bonds set out in the Information Memorandum dated 5th November, 2001 relating to the A$8,000,000,000 Global Exchangeable Bond Programme (pages 9 - 23);
the Terms and Conditions of the Bonds set out in the Information Memorandum dated 16th January, 2003 relating to the A$8,000,000,000 Global Exchangeable Bond Programme (pages 9 - 23);
the Terms and Conditions of the Bonds set out in the Base Prospectus dated 8th July, 2005 relating to the A$10,000,000,000 Global Exchangeable Bond Programme (pages 25 - 38);
the Terms and Conditions of the Bonds set out in the Base Prospectus dated 20th December, 2006 relating to the A$15,000,000,000 Global Exchangeable Bond Programme (pages 26 - 40);
the Terms and Conditions of the Bonds set out in the Offering Circular dated 17th December, 2008 relating to the A$18,000,000 Global Exchangeable Bonds Programme (pages 34-51);
the Terms and Conditions of the Bonds set out in the Offering Circular dated 18th December, 2009 relating to the A$18,000,000 Global Exchangeable Bonds Programme (pages 35-52); and
the Description of the Commonwealth and the Commonwealth Guarantee of State and Territory Borrowing dated 22nd November, 2010. which have previously been published or are published simultaneously with this Offering Circular and which have been approved by the Financial Services Authority.
Such documents shall be deemed to be incorporated in, and to form part of, this Offering Circular, save that any statement contained herein or in a document which is deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Offering Circular to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offering Circular. Any documents themselves incorporated by reference in the documents incorporated by reference in this Offering Circular shall not form part of this Offering Circular.
Copies of documents incorporated by reference in this Offering Circular can be obtained from the registered office of the Issuer.
11 SUPPLEMENTARY LISTING PARTICULARS
If at any time the Issuer shall be required to prepare supplementary listing particulars pursuant to Section 81 of the Financial Services and Markets Act 2000 (“FSMA”), the Issuer will prepare and make available an appropriate amendment or supplement to this Offering Circular or a further offering circular which, in respect of any subsequent issue of Bonds to be listed on the Official List and admitted to trading on the Market, shall constitute supplementary listing particulars as required by the UK Listing Authority and Section 81 of the FSMA.
The Issuer has given an undertaking to each Panel Member and Additional Underwriter (as defined in the Facility Agreement) that if at any time during the duration of the Programme, there is a significant new factor arising or any material mistake or inaccuracy relating to the information included in this Offering Circular which is capable of affecting the assessment of any Bonds, the Issuer will prepare and publish a supplement to this Offering Circular or publish a new offering circular for use in connection with any subsequent issue of Bonds and shall supply to each Panel Member and Additional Underwriter such number of copies of such supplement hereto as such Panel Member or Additional Underwriter may reasonably request. In addition, in the event of a substitution of the Issuer in the manner set out in Condition 13 a further supplement to this Offering Circular will be prepared and published or a new offering circular will be published for use in connection with any subsequent issue of the Bonds.
12 USE OF PROCEEDS
It is anticipated that the net proceeds from the issues of the Bonds will be applied towards the financing requirements of the State of New South Wales and its public and local authorities.
13 NEW SOUTH WALES TREASURY CORPORATION
New South Wales Treasury Corporation was established in June 1983 under the provisions of the TCA. The TCA states the objects and purposes of the Corporation. The Corporation is the central financing agency for the government and for all public authorities within the provisions of the PAFA Act. These are predominantly semi-government authorities involved in productive activities including electricity generation, water supply, rail and road transport and highway construction. Local government authorities may borrow through the Corporation if they so desire.
The Corporation is empowered to enter into all forms of financial accommodation, and funds borrowed by the Corporation are lent to the relevant public authorities or the government. Funds raised by the Corporation are invested by it pending advances to such borrowers. The Corporation also provides liability and asset management services for authorities and the government.
Investors in the securities of the Corporation issued in respect of borrowings obtained by the Corporation (including the Bonds and the Inscribed Stock) are provided, under the provisions of the PAFA Act, with security by way of a statutory charge on the income and revenue of the Corporation. All funds lent by the Corporation to public authorities are in turn secured on the income and revenue of those authorities.
Securities issued by the Corporation issued in respect of borrowings obtained by the Corporation (including the Bonds and the Inscribed Stock) are guaranteed by the State under the PAFA Act. The State guarantee for the borrowings of the Corporation is payable from the Consolidated Fund without the need for further legislative approvals.
The Corporation is not subject to any direct Federal income or New South Wales State taxes in the Commonwealth of Australia. The Corporation is subject to the Commonwealth goods and services tax which commenced on 1st July, 2000.
The Corporation is not regulated by the Australian Prudential Regulation Authority or the Australian Securities and Investments Commission, which govern most Australian financial markets operators. The Corporation’s activities are reviewed and monitored by a number of external entities including the Treasurer of New South Wales, the New South Wales Treasury and the Auditor-General of New South Wales. The Corporation is committed to governance matters by working with its Board of Directors and an external professional accounting firm to continually develop its internal governance awareness in line with recent industry pronouncements.
The broad policies of the Corporation are determined by a Board of Directors. The operations of the Corporation are managed by the Chief Executive in accordance with such policies and directions as may be given by the Board. Anything undertaken in the name of or on behalf of the Corporation by the Chief Executive, or with his authority, is taken to have been performed by the Corporation. The Corporation is subject to the control and direction of the Treasurer of New South Wales.
The principal office of the Corporation is at Level 22, Governor Phillip Tower, 1 Farrer Place, Sydney, New South Wales 2000, Australia and its telephone number is +61 2 9325 9325.
The present Board Members are as follows:
Michael Schur Chairperson of the Board; also Secretary of NSW Treasury Kevin Cosgriff Deputy Chairperson of the Board; member of Human Resources Committee; also Deputy Secretary, Fiscal
14 and Economic Directorate NSW Treasury Cristina Cifuentes Non-executive director, member of Audit and Risk Committee Michael Cole Non-executive director, Chairperson of Human Resources Committee Philip Chronican Non-executive director, Chair of Audit and Risk Committee Bruce Hogan Non-executive director, member of Human Resources Committee Stephen Knight Chief Executive of the Corporation Hon. Alan Stockdale Non-executive director, member of Audit and Risk Committee each with their business address at Level 22, Governor Phillip Tower, 1 Farrer Place, Sydney, New South Wales 2000, Australia.
The Corporation’s Audit and Risk Committee is an advisory body to the Corporation’s Board of Directors on issues relating to internal and external audit, financial reporting and other accountabilities.
The objective of the Audit and Risk Committee is to provide independent assistance to the Board by overseeing, monitoring and reporting on:
(i) The Corporation’s governance, risk and control frameworks (including internal and external audit functions) and its external accountability requirements; and
(ii) The Corporation’s annual financial statements.
The present members of the Audit and Risk Committee are Philip Chronican, Cristina Cifuentes and the Hon. Alan Stockdale.
The Corporation owns all of the issued share capital in TCorp Nominees Pty Limited (“TCorp Nominees” and together with the Corporation, the “Group”), a company incorporated in New South Wales. TCorp Nominees’ directors are Stephen Knight, Chief Executive of the Corporation, Clare Mifsud, General Counsel and Paul Smith, Chief Operating Officer.
The principal activity of TCorp Nominees consists of participating in financial transactions in conjunction with the Corporation. Substantial transactions between the Corporation and TCorp Nominees during the year ended 30th June, 2010 consisted of TCorp Nominees acting as security trustee in connection with a financing provided by the Corporation. On a consolidated basis, TCorp Nominees provides no additional assets/liabilities to the Corporation’s balance sheet.
Directors of the Corporation must monitor and disclose any actual or potential conflicts of interest as they arise. The Treasury Act 1983 requires any director who has a pecuniary interest in a matter being considered or to be considered by the Board of Directors of the Corporation, to declare the nature of the interest. These declared interests are recorded in a publicly available register. Unless the NSW Treasurer determines otherwise, the director is required not to attend meetings of the Board of Directors of the Corporation about matters relating to declared pecuniary interests or to take part in decisions about these matters. As at the date of this Offering Circular, there were no potential conflicts of interest between the duties of the members of the Board of Directors of the Corporation and their private interests and/or other duties. Certain of the members of the Corporation’s Board are also directors of other New South Wales government entities which are also clients of the Corporation.
15 THE CROWN IN RIGHT OF NEW SOUTH WALES
General The Notes are guaranteed by the Crown in Right of New South Wales. The contact address of the Crown in Right of New South Wales is Level 31, Governor Macquarie Tower, 1 Farrer Place, Sydney, New South Wales 2000, Australia and its telephone number is +61 2 9558 9000.
New South Wales (“NSW”) was established as a state of the Commonwealth of Australia under the Commonwealth of Australia Constitution Act (an Act of the British Parliament), by which New South Wales and five other British colonies became federated states under the name of the Commonwealth of Australia on 1st January, 1901.
The New South Wales Legislature consists of the Sovereign and two Houses of Parliament: the Legislative Assembly (the Lower House) and the Legislative Council (the Upper House). Either House may initiate legislation, with the exception of bills which appropriate revenue or impose taxation which must originate in the Lower House. Legislation must be passed by both Houses; however, in the Upper House there is a mechanism by which appropriation bills for the ordinary annual services of the Government may be assented to upon passage through the Lower House only.
The economy of New South Wales represents around one-third of Australia’s Gross Domestic Product and one-third of the national population. New South Wales enjoys a mature and diverse economic structure. Construction, finance, telecommunications, business services and transport are well established and expanding. With agricultural and mining sectors proportionately smaller than those in the other Australian States, the New South Wales economy is correspondingly less exposed to commodity cycles.
Sydney is one of the leading financial centres in the Asia-Pacific region and a centre for regional corporate headquarters. This reflects New South Wales’ diversified and increasingly service-oriented economy.
The State’s financial health is underscored by its AAA credit rating from two leading international rating agencies, Moody’s Investors Service Limited and Standard & Poor’s LLC.
Gross Domestic Product by Economic Sector The following table sets out the Gross Domestic Product at current prices by economic sector of the Guarantor for the financial years ended 30th June, 2009 and 30th June, 2010:
As at As at 30th June, 30th June, 2010(A$m) 2009 (A$m)
Gross State Product...... 406,917 394,980 Household Consumption Expenditure...... 234,698 225,888 General Government Consumption Expenditure ...... 65,554 62,143 Of which: State and Local Government ...... 42,567 39,995 Total Private Gross Fixed Capital Formation...... 71,064 69,667 Of which: Business Investment ...... 49,017 49,334 Dwelling Investment...... 16,931 16,175 Total Public Gross Fixed Capital Formation...... 22,825 19,001 State Final Demand...... 394,142 376,699
16 As at As at 30th June, 30th June, 2010(A$m) 2009 (A$m)
Source: ABS Pub 5220.0 National Accounts, Annual State Accounts 2009-10. The NSW economy grew by 0.2 per cent in 2008-09, despite the global financial crisis and global recession. This was a shallow downturn by historical standards and international experience. In part, the stronger growth in the Australian and NSW economies reflects the global economy recovering stronger than expected at Budget time in 2009. The International Monetary Fund (IMF) now expects that global output, after declining by 0.6 per cent in 2009, will grow by 4.2 per cent in 2010, slightly above its decade average. Historically, this is still a modest recovery given the scale of the downturn. Growth in Australia’s major trading partners is expected to be stronger than global growth. However, the global recovery has been uneven. Growth in most advanced economies has been weak to date and is likely to remain subdued, due to high levels of excess capacity, business and household deleveraging, fiscal consolidation, and ongoing financial sector strains. By contrast, a number of Australia’s major trading partners in Asia have recovered rapidly and authorities have now started to reduce their stimulus. Strong demand from Asia supported Australian bulk commodity exports and prices, and strengthened mining investment intentions. Australia’s terms of trade are rising after earlier steep falls and are forecast to strengthen further, reflecting higher prices for bulk commodity exports and subdued prices for manufactured imports. NSW economic trends differed somewhat from the national pattern in 2009-10, mainly reflecting the State’s industry composition and higher levels of mortgage debt. The State benefited strongly from monetary and fiscal stimulus and was less directly exposed to falling commodity prices and weaker global demand. Population growth has remained strong, increasing by 1.7 per cent in the year to September 2009 after averaging 1.7 per cent in 2008-09. The last time the State experienced population growth at this rate was in 1987-88. The working age population series indicates that strong growth was sustained during much of the year, with annual growth of 1.8 per cent to the March quarter 2010. Stronger population growth will support employment, consumption and housing investment
Consumer spending has been stronger than expected in the first half of 2009-10. Consumption was supported by a recovery in household wealth, a resilient labour market and high levels of consumer confidence. Consumer spending rose by 2.2 per cent in the first half of 2009-10, with real retail sales increasing by 1.9 per cent and discretionary retail spending growing strongly. Retail sales softened in the March quarter 2010 as the RBA increased interest rates and household incomes recovered slowly. Dwelling investment appears to have commenced its recovery in the first half of 2009-10, with modest gains in new construction and a strong lift in alterations and additions. Investment rose by 5.8 per cent in the first half of 2009-10 and is expected to continue to improve, given previous increases in housing finance and building approvals. While private building approvals have softened since late 2009, at March 2010, in trend terms, they remain 32.2 per cent above levels of a year ago. Private multi-unit dwellings remain a drag on activity, partly due to earlier tight credit conditions for financing of property developments. In the broader housing market, Sydney established house prices have recovered strongly, increasing by 21 per cent through-the-year to the March quarter 2010. However, new loan approvals for owner-occupiers have moderated since mid 2009 as the impact of the first home buyer stimulus tailed off and more recently, interest rates increased.
17 Business investment increased by 5.9 per cent in the first half of 2009-10, with a strong 13.4 per cent gain in machinery and equipment more than offsetting a 4.9 per cent decline in non-residential construction. Business investment rose sharply in the December quarter 2009 due to temporary tax concessions for machinery and equipment which ended in December 2009. While business investment is at its highest level on record, it is expected to slow in the second half of 2009-10 following the pull-forward in demand for machinery and equipment and ongoing softness in commercial and industrial construction, consistent with low private non-residential building approvals and past credit constraints. However, business sector deleveraging is moderating and conditions have improved, with surveys reporting firm trading conditions, improved capacity utilisation and sustained above-average levels of confidence.
The Structure of Government in New South Wales This section is based on information from the Parliament of New South Wales.
The Current Structure of the New South Wales Parliament
Legislative Assembly The Legislative Assembly or “lower house” is made up of representatives elected by the people of New South Wales. The State of New South Wales is divided into 93 electorates with one member representing each electorate. Members are elected for a fixed term of four years. Vo ting is compulsory for all persons over the age of 18 years. When the results of an election are known, the Governor commissions the leader of the party or parties who have a majority in the Legislative Assembly to form a government. The speaker is the presiding officer of the Assembly and is elected under the Constitution Act 1902 of New South Wales at the beginning of each new Parliament by the members from among themselves. By custom, the speaker does not take part in debates.
Legislative Council The Legislative Council, sometimes referred to as the “house of review” or “upper house”, has 42 members elected by the people on a state-wide basis for the duration of two Parliaments, with half the members retiring at elections held at the same time as General Elections for the Legislative Assembly. The President is the presiding officer of the Council and is elected by members of the Council from among themselves after each periodic Council election. Under the Constitution Act 1902 of New South Wales, the President may take part in debate in the Council.
The Cabinet The Ministry or Cabinet is made up of members of Parliament chosen from the party or parties that have a majority in the Legislative Assembly. The Cabinet stays in office for as long as it has the confidence of the Legislative Assembly, from which nearly all its members are drawn. A vote of “no confidence” in the Legislative Council does not affect the life of the Ministry. The Ministry is exclusively answerable to the Parliament and through the Parliament, to the people of New South Wales. In New South Wales, all ministers are members of the Cabinet and the Executive Council. As a result, the Cabinet is the most powerful part of the executive government of the State. Even in summoning, proroguing or dissolving Parliament, the Governor is guided by the advice of the Executive Council. The Cabinet supervises administrative policy, financial matters and the general legislative programme for the State of New South Wales. The Cabinet’s decisions are put into effect by the Executive Council or by individual ministers. Many administrative matters are determined by ministers without reference to the Executive Council. Every minister is therefore allowed considerable discretionary power in the ordinary affairs of a department.
18 Overview of 2009-10 Budget Result The Budget result for the financial year ended 30th June, 2010 was a surplus of A$944 million. This is A$1,984 million higher than the original 2009-10 Budget Paper estimate of a $990 million deficit and an A$893 million improvement on the estimate contained in the 2010-11 Budget Paper. The improved budget position during 2009-10 reflected better than expected economic activity. An analysis of the result compared to the Budget (as presented in the 2009-10 Budget Papers) is outlined below.
State Revenues State revenues increased by A$3,375 million against budget, as outlined below.
Taxation Taxation revenue was A$1,118 million above the Budget-time estimate.
Transfer duty on property transfers is the largest single component of stamp duty revenues. It is the most volatile revenue source collected by the State. Stamp duty revenue was A$1,009 million higher than the Budget estimate, reflecting an earlier than expected recovery in the residential property market.
In total, other taxes were A$109 million over the 2009-10 Budget estimate.
Government guarantee fees charged to government business were A$198 million higher than the 2009-10 Budget estimate. This was due to increased debt levels and increased guarantee fee rates as a result of higher market interest rate margin over the Treasury Corporation rate.
Motor vehicle registrations were A$56 million higher than the 2009-10 Budget estimate, in part boosted by the Commonwealth of Australia’s temporary Investment Allowance.
The Electricity Tariff Equalisation Ministerial Corporation reported a net increase in funds received from retailers (A$53 million) due to national wholesale market prices being lower overall than the regulated cost component that retailers charge their regulated customers.
Land tax and payroll tax fell short of their 2009-10 Budget estimates. An A$56 million shortfall in land tax was in part due to lower than expected values for commercial and industrial property. An A$35 million shortfall in payroll tax was largely attributable to lower average working hours worked within a higher level of total employment.
Commonwealth Grants
Grants and subsidies in total were A$1,306 million higher than budgeted. Commonwealth general purpose payments were A$798 million higher than excepted mainly due to GST revenue (A$997 million). This was offset by a number of one-off factors including a repayment to the Australian Government of A$121 million for compensation following revised arrangements for the Wine Equalisation Tax and for small business GST collections.
Commonwealth national agreements and Commonwealth national partnership payments were A$504 million above the 2009-10 Budget estimate due to a combination of new grants and changes to existing grant programs.
Sale of Goods and Services
Sale of goods and services includes revenue from the use of government assets as well as revenue generated by agencies in their normal trading activities.
Sales of goods and services exceed the 2009-10 Budget estimate by $468 million mainly due to the reclassification of the High Cost Drugs program grant (A$191 million), the recognition for the first time or personnel services revenue to Housing NSW from Land and Housing Corporation (A$213 million) and the
19 toll revenues associated with the Sydney Harbour Tunnel following its reclassification as a finance lease (A$43 million). There are corresponding expenses for the personnel services and toll revenues.
Interest
Interest income includes returns on advances to public trading enterprises, returns on Treasury Corporation deposits and on deposits with financial institutions.
Investment revenue deteriorated by A$74 million over the 2009-10 Budget estimate largely because of lower than expected returns flowing from investment markets. Agencies affected include the NSW Self Insurance Corporation (A$79 million) and Department of Health (A$32 million).
Financial Distributions
Dividends and income tax equivalent payments are paid by commercial Government businesses to ensure competitive neutrality with the private sector and encourage the businesses to make commercial investment decisions. Dividends and taxes increased by A$24 million in 2009-10. Higher profitability in the energy sector was offset by lower dividends and income tax equivalents from Sydney Water and the sale of NSW Lotteries Corporation.
Other dividends and distributions were A$80 million above the 2009-10 Budget estimate. This was mainly due to higher distributions from the NSW Treasury Corporation Hour-Glass facility to the NSW Self Insurance Corporation (A$43 million) and Department of Health (A$42 million). The higher distributions largely reflect the restructuring of agency investment portfolios, resulting in reduced interest earning investments and increased equity investments.
Fines, Regulatory Fees and Other
Revenues from fines, regulatory fees and other revenues were A$453 million higher than 2009-10 Budget estimates. Revenues increased significantly due to the transfer of council roads to the Roads and Traffic Authority of NSW following implementation for the NSW Road Reclassification Review (A$313 million). The Crown Finance Entity also received higher than expected recoveries from the HIH liquidation process and the Crown assumption of additional builder and third party motor vehicle liabilities (A$71 million).
Expenses
Total expenses increased by A$1,391 million against budget as outlined below.
Roads and Traffic Authority expenses were A$530 million higher than budget primarily due to the transfer of roads to local councils following implementation of the NSW Roads Reclassification Review (A$401 million), recognition of expenses associated with the Sydney Harbour Tunnel following its inclusion as an RTA asset acquired under finance lease (A$53 million) and additional road maintenance due to storm damage (A$70 million).
Department of Infrastructure and Transport expenses were A$438 million higher than the 2009-10 Budget estimate. This was primarily due to additional funding for the South West Rail Link (A$350 million), higher private bus service contract payments (A$39 million) as a result of the introduction of new buses, the Rail Infrastructure Improvement program (A$52 million) and RailCorp for the early implementation of the Metropolitan Transport Plan (A$115 million). Increased expenses were in part offset by savings from the Sydney Metro and other miscellaneous savings.
Crown Finance Entity expenses were A$263 million higher than the 2009-10 Budget estimate. This increase was driven by a number of factors including the reclassification of business asset transaction costs to operating expenses (A$92 million), superannuation expenses (A$74 million), long service leave expense
20 (A$48 million), higher HIH liabilities based on an actuarial review (A$71 million), additional First Home Owners Scheme grants (A$41 million), repayment of an Australian government grant because of the cancellation of the Sydney Metro project (A$80 million) and interest expenses (A$38 million). Offsetting expenditure reductions included natural disasters funding (A$51 million), the reclassification of the Housing Construction Acceleration plan (A$64 million) and guarantee fee payments to the Australian government (A$24 million).
Department of Human Services expenses were A$239 million higher than the 2009-10 Budget estimate mainly due to the recognition for the first time of personnel services revenue received by Housing NSW from Land and Housing Corporation (A$213 million).
Land and Property Management Authority expenses exceeded the 2009-10 Budget estimate by A$27 million. This was primarily grants of land to local councils, Crown Reserve Trusts and Aboriginal land claims (A$154 million).
Police expenses were A$156 million higher than the 2009-10 Budget estimate. This was mainly due to an increase in Death and Disability expense (A$80 million), additional funding approved for salary maintenance (A$50 million) and other increases in expenses funded by additional revenues (A$19 million).
NSW Self Insurance Corporation expenses were A$147 million higher than the 2009-10 Budget estimate. The increase was primarily due to higher claims payments and the actuarial forecasts for outstanding liabilities relating to NSW Police workers compensation. These increases were offset by lower than expected public liability claims emergence and the reduction of previous liabilities forecasts relating to the Canberra bushfires in 2002-03.
The following tables set out the income and expenditure of the Guarantor:
General Government Statement of Comprehensive Income 2009-10 2009-10 2008-09 Actual Budget Actual
(A$m)
State Revenues Taxation ...... 19,129 18,011 17,855 Grants and Subsidies Commonwealth General Purpose ...... 13,419 12,621 11,974 Commonwealth National Agreements...... 6,554 6,621 6,573 Commonwealth National Partnership Payments ...... 6,367 5,796 3,145 Other Grants and Subsidies ...... 643 639 617 Sale of Goods and Services...... 4,327 3,859 4,048 Interest...... 316 390 415 Dividend and Income Tax Equivalents from Other Sectors...... 2,037 2,013 1,828 Other Dividends and Distributions...... 285 205 196 Fines, Regulatory Fees and Other ...... 3,256 2,803 3,012 Total Revenues ...... 56,333 52,958 49,663
21 2009-10 2009-10 2008-09 Actual Budget Actual
(A$m)
Expenses Employee ...... 23,073 22,724 22,080 Superannuation Superannuation Interest Cost...... 951 851 705 Other Superannuation...... 2,120 2,177 1,955 Depreciation and Amortisation ...... 2,769 2,915 2,614 Interest...... 1,653 1,531 1,505 Other Property...... 1 1 1 Other Operating...... 11,588 11,426 10,969 Grants and Subsidies Current Grants and Subsidies ...... 7,987 8,274 7,697 Capital Grants...... 5,197 4,049 2,999 Total Expenses...... 55,339 53,948 50,525 Budget Result – Surplus/(Deficit) ...... 994 (990) (862)
Source: NSW Treasury, New South Wales Report on State Finances 2009-10, pages 1-6 and 1-139.
Net Financial Liabilities by Sector The following table sets out the Net Financial Liabilities by sector of the Guarantor:
As at 30th June,
2010 2009 Actual Actual
(A$m)
General Government Sector Gross Debt ...... 19,073 16,603 Cash, Advances and Investments(1) ...... 9,709 8,495 Underlying Net Debt...... 9,364 8,108 Underlying Unfunded Superannuation...... 32,722 29,423 Other non-equity liabilities ...... 5,717 5,501 Other(2) ...... 10,910 9,888 Net Financial Liabilities(3)...... 52,884 48,211 Public Trading Enterprise Sector Gross Debt ...... 26,700 23,315 Cash, Advances and Investments(1) ...... 3,047 2,569
22 As at 30th June,
2010 2009 Actual Actual
(A$m)
Net Debt...... 23,653 20,746 Underlying Unfunded Superannuation...... 1,807 1,579 Other non-equity liabilities ...... 1,888 1,642 Other(2) ...... 2,064 2,076 Net Financial Liabilities(5)...... 36,901 32,264 Public Financial Enterprise Sector Gross Debt ...... 56,136 47,034 Cash, Advances and Investments(1) ...... 55,452 48,146 Net Debt(4) ...... 684 497 Other(2) ...... 1,081 718 Net Financial Liabilities(5)...... 1,024 (83) Total State Sector Underlying Net Debt...... 33,698 29,350 Unfunded Superannuation...... 34,530 31,003 Other non-equity liabilities ...... 7,326 6,642 Other(2) ...... 12,944 11,911 Net Financial Liabilities...... 90,680 80,327 Source: NSW Treasury Report on State Finances 2009-10, pages 2-4 to 2-5
Notes: (1) Gross amount of insurance assets are included in accordance with Australian Bureau of Statistics net debt calculation standards. (2) Mainly represented by employee entitlements, such as long service leave and offset by other non-equity financial assets such as receivables. “Other” in the PFE sector includes insurance claims and in both the PTE and PFE sectors includes tax payable to the general government sector. (3) Equity investment in the PTE/PFE sectors is excluded to give a more conservative picture of the general government sector’s overall financial obligations. (4) Attribution of net debt to the PFE sector results from the valuation of debt liabilities at current capital value. (5) PTE and PFE net financial liabilities exclude the States contributed capital, which the Australian Bureau of Statistics treats as a component of Net Financial Worth.
Gross Debt – Current Component The following table sets out the Gross Debt of the Guarantor by current component:
2010 2009
(A$m)
General Government Sector...... 19,073 16,603 Public Trading Enterprises...... 26,700 23,315
23 2010 2009
(A$m)
Public Financial Enterprises...... 56,136 47,034 Total State Sector...... 59,277 49,956 Source: NSW Treasury Report on State Finances 2009-10, pages 2-4 to 2-5
The Total State Sector will not equal the sum of the other sectors as there are eliminations performed on consolidation of the Total State Sector, between the various sectors’ gross debt and other sectors’ investments/loans.
The following table sets out the maturity structure of domestic currency debt of the Guarantor for the two fiscal years prior to the date of the document:
Time until maturity of Guarantor domestic and foreign debt As at 30th As at 30th June, 2010 June, 2009
(A$m)
Less than one year...... 16,164 11,803 1-5 years ...... 24,285 25,889 More than five years...... 35,757 29,735 Total ...... 76,206 67,427 Source: NSW Treasury Report on State Finances 2009-10, p1-108.
The following table sets out the gross public debt of the Guarantor issued in its domestic currency and in foreign currencies:
As at 30th June,
2010 2009
Domestic currency – Australian dollars (A$m)...... 48,454 40,887 Foreign currency – Japanese Yen (¥m) ...... 145,962 154,614 Foreign currency – Pounds Sterling (£m) ...... 300 283 Foreign currency – US Dollars (US$m) ...... 150 -
Foreign currency exposure is managed through the use of cross currency swap transactions, whereby the full amount of the foreign currency issue is swapped back to the domestic currency of the Guarantor.
The Debt Payment Record of the Guarantor There have been no defaults by the Guarantor.
The following table sets out the Total State Sector Accounts Statement of Financial Position:
24 As at 30th June,
2010 2009
(A$m)
Financial Assets Cash and Cash Equivalent Assets ...... 6,299 5,541 Receivables ...... 6,775 7,197 Financial Assets at Fair Value...... 19,857 15,763 Advances Paid...... 434 319 Equity Investment in Associates ...... 1,305 1,050 Total Financial Assets...... 34,670 29,870 Non-Financial Assets Inventories...... 1,349 1,298 Forestry Stock and Other Biological Assets...... 669 560 Assets Classified as Held for Sale...... 267 173 Investment Properties...... 1,023 1,023 Property, Plant and Equipment Land and Buildings...... 104,312 96,686 Plant and Equipment...... 12,122 11,567 Infrastructure Systems...... 118,176 106,018 Intangibles...... 2,628 2,242 Other ...... 1,497 1,374 Total Non-Financial Assets...... 242,043 220,941 Total Assets...... 276,713 250,811
Liabilities Deposits Held...... 206 182 Payables ...... 6,541 6,224 Borrowings at Amortised Cost...... 2,411 2,179 Borrowings and Derivatives at Fair Value...... 56,866 47,777 Advances Received ...... 805 835 Employee Provisions...... 12,944 11,911 Superannuation Provision ...... 34,530 31,003 Other Provisions...... 7,326 6,642 Other ...... 3,721 3,444 Total Liabilities ...... 125,350 110,197
25 As at 30th June,
2010 2009
(A$m)
Net Assets...... 151,363 136,014 Net Worth Accumulated Funds...... 60,398 60,250 Reserves ...... 90,965 80,364 Total Net Worth ...... 151,363 140,614 Source: NSW Treasury Report on State Finances 2009-10, p1-9.
Foreign Trade and International Balance of Payments
Foreign Trade External trade plays an important part in the Australian economy.
External Account, Current Prices The following table sets out Australia’s external account balance for two fiscal years ended 2009/10:
2009/10 2008/09
(A$m)
Exports ...... 254,395 285,352 Imports ...... -260,094 -279,448 Trade Balance...... -5,699 5,904
Source: ABS Cat. No. 5206.0.
Merchandise Exports and Imports by Region The following table sets out merchandise exports and imports by region for the fiscal year ended 2009/10
Country Exports Imports
(A$m)
Japan ...... 37,070 17,780 China (including Hong Kong)...... 48,742 37,492 ASEAN ...... 19,838 41,084 Republic of Korea ...... 16,530 7,050 India ...... 16,096 1,846 European Union ...... 15,863 38,498 United States ...... 9,543 21,856 United Kingdom...... 7,203 5,773 New Zealand ...... 8,041 7,000
26 Country Exports Imports
(A$m)
Japan ...... 37,070 17,780 China (including Hong Kong)...... 48,742 37,492 Taiwan...... 6,855 3,416
Source: ABS Cat. No. 5368.0., June 2010, International Merchandise Trade, By Country and country groups, p.29.
Balance of Payments The following table sets out details of Australia’s balance of payments for the two fiscal years ended 2009/10:
Goods and Services, Summary
(A$m)
2009/10 2008/09
Balance on goods and services...... -5,965 -12,113 Total goods and services credits...... 254,004 266,437 Total goods credits ...... 201,458 231,564 Rural goods ...... 25,515 29,383 Non-rural and other goods ...... 161,389 184,372 Total services credits...... 52,546 52,873 Total goods and services debits...... -259,969 -278,550 Total goods debits ...... -206,019 -222,378 Consumption goods...... -62,337 -61,419 Capital goods...... -48,078 -51,572 Intermediate and other goods ...... -88,499 -97,865 Total services debits ...... -53,950 -56,172
Source: ABS Cat. No. 5368.0.
Australian Foreign Exchange Reserves The following table sets out details of the Australian Foreign Exchange reserves as at 30th June for the two fiscal years ended 2009/10:
2009/10 2008/09
(A$m)
Value at 30th June ...... 43,737 48,073
Source: Reserve Bank of Australia, Official Reserve Assets.
27 Description of the Guarantee The due and punctual payment of principal, interest and other changes in respect of the Notes are guaranteed by the Guarantor pursuant to the provisions of Section 22A(1) of the PAFA Act. Pursuant to Section 22G(2) of the PAFA Act, all obligations of the Guarantor under the Guarantee rank equally without preference with all other outstanding obligations of the Guarantor. The Guarantee is unconditional and may only be revoked by legislation passed by the Parliament of New South Wales. Amounts payable pursuant to the Guarantee are payable from the Consolidated Fund of the Guarantor without the need for further legislative approvals.
The Guarantee does not include any requirement to make payments in gross or pay additional amounts should any deduction or withholding be required.
28 DESCRIPTION OF THE PROGRAMME AND THE INSCRIBED STOCK
Bonds will be issued under the Programme pursuant to a Facility Agreement dated 18th August, 1993 (as amended and restated pursuant to an Amending and Restating Agreement dated 14th December, 2007 (together, the “Facility Agreement”)) made between the Issuer, the Arranger and the Panel Members.
The Facility Agreement provides for issues of Bonds to be made on either an underwritten or non- underwritten basis.
Bonds will only be issued with a maturity and coupon identical to a line of Inscribed Stock existing at the time of their issue, into which they will be exchangeable.
As at the date of this Offering Circular the Corporation had issued Bonds exchangeable into one or more of the following issues of Inscribed Stock:
6.0 per cent. Inscribed Stock due 1st May, 2012 5.5 per cent. Inscribed Stock due 1st August, 2014 5.5 per cent. Inscribed Stock due 1st March, 2017 6.0 per cent. Inscribed Stock due 1st April, 2019
As at the date of this document, details of the current trading prices of each issue of Inscribed Stock could be found on Telerate page No. 22869, Reuters page TCOT and Bloomberg page NSWT1.
The Corporation is permitted to make issues of Inscribed Stock with maturities and coupons other than those currently in issue. The Facility Agreement provides for the issue of Bonds exchangeable into Inscribed Stock which, although not in issue as at the date of this document, may be issued by the Corporation from time to time.
Inscribed Stock is issued in accordance with the provisions of the PAFA Act and the Public Authorities (Financial Arrangements) Regulation 2005 made thereunder (“PAFA Reg”).
Currently, no series of Inscribed Stock is listed on the Australian Stock Exchange. The Corporation will use its best endeavours to obtain a listing on the Australian Stock Exchange of a tranche of Inscribed Stock at issue, if requested to do so by a Bondholder seeking to become an investor in that Inscribed Stock.
Inscribed Stock constitutes direct, unconditional and general obligations of the Corporation, and investors in Inscribed Stock are provided with security by way of a charge on the income and revenue of the Corporation. Principal is repayable at par in Australian dollars on the maturity date, while interest is payable semi-annually and similarly is payable in Australian dollars. Payments of principal and interest are made by the Registry (as defined below) in arrear on the first day of the month, corresponding to the date of maturity of the Stock, and on the first day of the month, six months hence, by Australian dollar cheque posted to the registered owner of Inscribed Stock or collected from an office of the Registry in Australia. If the owner holds the Inscribed Stock in the Austraclear system, payments are made through that system. The Corporation is not obliged to gross up or make any additional payments to a holder of Inscribed Stock in respect of any such withholding tax. In addition, there are no covenants or events of default applicable to the Inscribed Stock.
Save in respect of the method of payment, the liability of a Non-Resident to Australian withholding tax and the lack of covenants and events of default, in each case as described above, the terms of the Inscribed Stock into which the Bonds are exchangeable are in all material respects equivalent to those of such Bonds.
29 The Corporation maintains registry facilities (the “Registry”) in Sydney at the office of Link Market Services Limited, Level 12, 680 George St, Sydney, New South Wales 2000 and in other major Australian capital cities.
The Inscribed Stock may not be redeemed prior to its stated maturity, but may be purchased and retained, on- sold or cancelled by the Corporation.
The due payment of interest and the due repayment of principal at maturity of all Inscribed Stock are guaranteed by The Crown in Right of New South Wales (the Government of New South Wales) under Section 22A(1) of the PAFA Act. The guarantee is unconditional and may only be revoked by legislation passed by the Parliament of New South Wales.
30 TERMS AND CONDITIONS OF THE BONDS
The following are the terms and conditions (subject to completion and minor amendment as set out in the Final Terms) of the Bonds to be issued under the Programme (as described under “Description of the Programme and Inscribed Stock”) and exchangeable into New South Wales Treasury Corporation Inscribed Stock. Paragraphs in italics are inserted for information purposes only.
The issue of A$[ ] [ ] 1 per cent. Guaranteed Global Exchangeable Bonds due [ ]1 (the “Bonds”) was authorised by a decision of the Chief Executive of the New South Wales Treasury Corporation (the “Issuer”) pursuant to Section 4(4) of the Treasury Corporation Act 1983, confirmed on 12th December, 2007. The Bonds are guaranteed as to principal, interest and other charges by The Crown in Right of New South Wales (the “Guarantor”) under a statutory guarantee (the “Guarantee”) pursuant to Section 22A(1) of the Public Authorities (Financial Arrangements) Act 1987 of the State of New South Wales (“PAFA Act”). The Bonds will be issued pursuant to, and with the benefit of, a fiscal agency agreement dated 21st March, 1989 which was amended and restated pursuant to an Amending and Restating Agreement dated 14th December, 2007 (together, the “Fiscal Agency Agreement”) made between the Issuer, Deutsche Bank AG, London Branch as fiscal agent (the “Fiscal Agent”), Deutsche Bank Trust Company Americas as registrar and Deutsche Bank Luxembourg S.A. as paying agent. Certain paying agents (the “Paying Agents”) will be appointed pursuant to the Fiscal Agency Agreement for the purpose of making payments in respect of the Bonds and the coupons appertaining thereto (the “Coupons”) and the Fiscal Agent will be appointed as exchange agent (the “Exchange Agent”), and as transfer agent (the “Transfer Agent”) in respect of the Bonds. Deutsche Bank Trust Company Americas will act as registrar (the “Bond Registrar”) for the purposes of maintaining a register of Bonds in registered form. The names and specified offices of the current Paying Agents are specified below. Copies of the Fiscal Agency Agreement (including the form of the Bonds) will be available for inspection free of charge at the specified offices of the Fiscal Agent, the Exchange Agent and the Paying Agents listed below. The holders of the Bonds (the “Bondholders”) and of the Coupons (the “Couponholders”) will be entitled to the benefit of, will be bound by and will be deemed to have notice of, all the provisions of the Fiscal Agency Agreement.
1 FORM, DENOMINATION AND TITLE
Each tranche of Bonds will be initially represented by (a) a temporary Global Bearer Bond, (b) a DTC Registered Global Bond, (c) an International Registered Global Bond, and/or (d) Definitive Registered Bonds.
Temporary Global Bearer Bonds and International Registered Global Bonds: In the case of Bonds to be initially represented by a temporary Global Bearer Bond or an International Registered Global Bond, a temporary Global Bearer Bond or an International Registered Global Bond, as the case may be, will be delivered to a common depositary for Euroclear and Clearstream, Luxembourg. Such Bonds will be credited to the Euroclear or Clearstream, Luxembourg account, as the case may be, of the purchaser purchasing the Bonds in accordance with the usual procedures of Euroclear and Clearstream, Luxembourg. International Registered Global Bonds will be registered in the name of, or a nominee for, a common depositary for Euroclear and Clearstream, Luxembourg.
If a Series of Bonds is represented by both one or more Bearer Bonds (including one or more temporary Global Bearer Bonds) and one or more International Registered Global Bonds, such Bearer Bond or Bonds
1 The interest rate and maturity of the Bonds will correspond to the interest rate and maturity of the Inscribed Stock into which such Bonds are exchangeable.
31 and International Registered Global Bond or Bonds will be assigned separate Common Codes by Euroclear and Clearstream, Luxembourg. Accordingly, Bonds of a Series represented by one or more Bearer Bonds (including one or more temporary Global Bearer Bonds) will trade in Euroclear and Clearstream, Luxembourg separately from Bonds of such Series represented by one or more International Registered Global Bonds.
A temporary Global Bearer Bond will be exchangeable for definitive Bonds in bearer form not earlier than the Exchange Date (as defined below) upon certification of non-U.S. beneficial ownership (unless such certification has been received previously as described under “Interest” below).
As used herein “Exchange Date” means, for any Bond, the date 40 days after the issue date for such Bond.
DTC Registered Global Bonds: DTC Registered Global Bonds will be delivered to the custodian for DTC and DTC Participants (as defined below) acting on behalf of purchasers. Such purchasers will be required to follow the settlement practices applicable to securities eligible for DTC’s same-day funds settlement (SDFS) system. Delivery of DTC Registered Global Bonds will be made free of payment. Such purchasers will be required to make payments directly to the Issuer in the manner indicated in writing by the Issuer. Prior to initial settlements of the Bonds to be distributed through DTC, each DTC Participant to whom an interest in a DTC Registered Global Bond will be credited will be required to certify its qualification as a qualified institutional buyer under Rule 144A under the Securities Act. In addition, subject to certain exceptions, transfers of interests in a DTC Registered Global Bond may only be made in accordance with Rule 144A and Regulation S under the Securities Act. See “Transfer and Settlement of Interests in Global Bonds — Restrictions on Transfer” below. For additional information relating to DTC Registered Global Bonds, see “Special Provisions Relating to Global Bonds” below.
Definitive Registered Bonds: Bonds to be represented by Definitive Registered Bonds will be issued in such form on the relevant issue date.
The Bonds will be issued in bearer, serially numbered, form (“Bearer Bonds”) in [the denomination of A$100,000] [denominations of A$1,000, A$10,000 and A$100,000] with Coupons attached or in registered form (“Registered Bonds”) in [the denomination of A$100,000] [denominations of A$1,000, A$10,000 and A$100,000] or integral multiples thereof (“authorised denominations”) without Coupons attached. Title to the Bearer Bonds and Coupons will pass by delivery. Title to the Registered Bonds passes by registration in the register which the Issuer shall procure to be kept by the Bond Registrar. In these Conditions “Bondholder” and (in relation to a Bond or Coupon) “holder” mean the bearer of any Bearer Bond or Coupon (as the case may be) and the person in whose name a Registered Bond is registered, as the case may be. Except as ordered by a court of competent jurisdiction or as required by law the Issuer, the Guarantor, the Fiscal Agent, the Exchange Agent, the Bond Registrar, the Transfer Agent and the Paying Agents shall be entitled to treat the holder of any Bond or Coupon, whether or not such Bond or Coupon shall be overdue and notwithstanding any notice of ownership or writing thereon or any notice of previous loss or theft or of trust or other interest therein, as the absolute owner thereof and shall not be required to obtain any proof thereof or as to the identity of the holder.
2 EXCHANGES OF BONDS AND TRANSFERS OF REGISTERED BONDS
(a) Exchange of Bonds
Subject as provided in paragraph (e) below, Bearer Bonds may be exchanged for the same aggregate principal amount of Registered Bonds of authorised denominations at the request in writing of the Bondholder and upon surrender of the Bearer Bond to be exchanged together with all unmatured
32 Coupons relating to it to the specified office of the Transfer Agent. Registered Bonds may not be exchanged for Bearer Bonds.
(b) Transfer of Registered Bonds
A Registered Bond may be transferred in whole or in part in an authorised denomination upon the surrender of the Registered Bond to be transferred, together with the form of transfer endorsed on it duly completed and executed, at the specified office of the Bond Registrar or the specified office of the Transfer Agent. In the case of a transfer of part only of a Registered Bond a new Registered Bond in respect of the balance not transferred will be issued to the transferor.
Transfers of DTC Registered Global Bonds will be subject to the requirements set out in “Special Provisions Relating to Global Bonds” and “Transfer and Settlement of Interests in Global Bonds” below.
(c) Delivery of new Bonds
Each new Bond to be issued upon exchange of a Bearer Bond or a transfer of a Registered Bond will, within three business days of receipt of such request for exchange or form of transfer, be available for delivery at the specified office of the Transfer Agent or of the Bond Registrar (as the case may be) stipulated in the request for exchange or form of transfer, or be mailed at the risk of the holder entitled to the Bond to such address as may be specified in such request or form of transfer.
(d) Formalities free of charge
Exchange of Bonds on registration or transfer will be effected without charge by or on behalf of the Issuer, the Bond Registrar or the Transfer Agent, but upon payment (or the giving of such indemnity as the Registrar or the Transfer Agent may require in respect) of any tax or other governmental charges which may be imposed in relation to it.
(e) Closed periods
No Bondholder may require the transfer of a Registered Bond to be registered or a Bearer Bond to be exchanged for a Registered Bond (i) during the period commencing [on (and including) the sixteenth]2 [at close of business on the eighth]3 4 day (or if that is not a Business Day, the immediately preceding Business Day) [of the month]2 immediately preceding the due date for any payment of principal on that Bond and ending on that date, or (ii) in respect of which an Exchange Notice (as defined in paragraph (c) of “Exchange” below) has been given. A Bearer Bond called for redemption may, however, be exchanged for a Registered Bond which is simultaneously surrendered not later than the relevant Record Date (as defined in “Payments” below).
As used above, “Business Day” has the meaning provided in paragraph (j) of “Exchange” below.
2 Retain in the case of a further issue where outstanding Bonds of the same Series have this provision unless, at the time of issue, an Extraordinary Resolution (as defined in the Fiscal Agency Agreement) has been passed by the holders of such outstanding Bonds of the same Series approving the alternative set out in (3). 3 Delete in the case of a further issue where outstanding Bonds of the same Series do not have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving this alternative to that set out in (2). 4 An original issue of Bonds may contain either of the alternatives set out in (2) and (3).
33 3 STATUS AND GUARANTEE
The Bonds shall be at all times direct, unconditional and unsubordinated obligations of the Issuer and the due payment of all moneys payable pursuant to the Bonds will be, by virtue of Section 22C(1) of the PAFA Act, a charge on the income and revenue of the Issuer from whatever source arising. The moneys payable under the Bonds by virtue of Section 22G(1) of the said Act rank and will continue to rank equally without preference by reason of priority of date or otherwise with all obligations to repay financial accommodation, which repayment is secured by the income and revenue of the Issuer.
The due and punctual payment of principal, interest and other charges in respect of the Bonds are guaranteed by the Guarantor pursuant to the provisions of Section 22A(1) of the PAFA Act. Pursuant to Section 22G(2) of the PAFA Act, all obligations of the Guarantor under the Guarantee rank equally without preference with all other outstanding obligations of the Guarantor.
The Issuer has not granted, and confirms that it does not intend to grant, a negative pledge covenant whether in respect of its borrowings or in respect of guarantees of the borrowings of any public authority of the State of New South Wales or otherwise. Accordingly, the Bonds do not prohibit the Issuer from creating or permitting to exist other obligations which have the benefit of security over assets.
4 INTEREST
(a) Interest will accrue on the Bonds at the rate of [ ]5 per cent. per annum from and including [ ] [ ], 20[ ]6 and will be payable semi-annually in arrear on [ ] [ ]7 and[ ][ ]7 (each an “Interest Payment Date”) in each year (the first payment being made on [ ]8) and will amount to A$[ ] per A$1,000 principal amount of Bonds. Interest will cease to accrue on each Bond on the due date for redemption thereof unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue (as well after as before any judgment) up to but excluding the date on which, upon further presentation thereof, payment in full of the principal thereof is made or (if earlier) the fifth day after notice is duly given to the holder thereof (either in accordance with “Notices” below or individually) that upon further presentation thereof being duly made such payment will be made, provided that upon further presentation thereof being duly made such payment is in fact made.
Interest payable in respect of Bonds represented by a temporary Global Bearer Bond prior to the relevant Exchange Date (as defined under “Form, denomination and title”) will only be made against certification as to non-U.S. beneficial ownership. By making such certification of non-U.S. beneficial ownership, the Bondholder shall be deemed to elect to exchange the temporary Global Bearer Bond in respect of which the certification is made for definitive Bonds in bearer form.
(b) Whenever it is necessary to compute an amount of interest in respect of any Bond for a period of less than six months such interest shall be calculated on the basis of a year of the actual number of days elapsed from and including the date from which interest begins to accrue to but excluding the date on
5 The interest rate in respect of the Bonds will correspond to the interest rate of the Inscribed Stock into which such Bonds are exchangeable. 6 In the case of an original issue of Bonds, interest may accrue either from the interest payment date immediately preceding the date on which the Bonds are issued as if the Bonds had been outstanding since that interest payment date or from the first interest payment date after the issue of the Bonds. In the case of a further issue, interest will accrue from the interest payment date immediately preceding the date on which the Bonds are issued as if the Bonds had been outstanding since that interest payment date. 7 The interest payment dates will correspond to the interest payment dates of the Inscribed Stock into which the Bonds are exchangeable. 8 The first interest payment date after the issue of the Bonds.
34 which it falls due, divided by the number of days in the Interest Period in which the relevant period falls (including the first such day but excluding the last).
“Interest Period” means the period beginning on (and including) [ ] [ ], 20[ ] and ending on (but excluding) [ ] [ ], 20[ ] (being the first Interest Payment Date) and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.
(c) Interest in respect of each Bearer Bond shall be payable against presentation and surrender of the relevant Coupon, subject to and in accordance with “Payments” and “Prescription” below provided that if (otherwise than by reason of the application of paragraph (d) of “Payments” below) the due date for redemption of any Bond is not an Interest Payment Date or if payment of principal is improperly withheld or refused on or in respect of any Bond, interest accrued in respect of such Bond from (and including) the last preceding Interest Payment Date (or in the case of a date for redemption prior to [ ],9 interest will accrue from (and including) [●]10) will be paid against presentation and surrender of such Bond. Interest on Registered Bonds will be mailed to the holder (or to the first-named of joint holders) of such Bond at his address appearing in the register, subject to and in accordance with “Payments” and “Prescription” below.
5 REDEMPTION AND PURCHASE
(a) Final redemption
Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on [ ] [ ], 20[ ].11
(b) Redemption for taxation reasons
If on the occasion of any future payment in respect of the Bonds and as a result of any change in, or amendment to, the application or interpretation of any law or regulation of the Commonwealth of Australia (other than the State of New South Wales) or of any political subdivision thereof (other than the State of New South Wales) or of any authority thereof or therein having power to tax (other than the State of New South Wales) which becomes effective after [ ], 20[ ],12 the Issuer would be required to pay additional amounts pursuant to “Taxation” below, then the Issuer may, at its option, upon giving not more than 60 nor less than 30 days’ notice in accordance with “Notices” below, prepay at any time all but not some only of the Bonds at their principal amount together with interest accrued to the date fixed for such redemption.
(c) Purchases
[The Issuer may at any time purchase Bonds (provided that in the case of Bearer Bonds all unmatured Coupons appertaining thereto are attached thereto or surrendered therewith) in any manner at prices (exclusive of expenses and accrued interest) not exceeding (i) in the case of a purchase by tender, the average of the middle market quotations derived from the Official List of the London Stock Exchange plc (the “London Stock Exchange”) for the 10 business days prior to the date of purchase (the “Average Price”) or (ii) in the case of a purchase through the London Stock Exchange, the greater of
9 The first interest payment date after that determined under note (6) above. 10 The date interest started to accrue (see note (6)). 11 The maturity of the Bonds will correspond to the maturity of the Inscribed Stock into which such Bonds are exchangeable. 12 The date on which the Bonds are issued in the case of an original issue. In the case of a further issue, the date specified in the original issue of Bonds.
35 the Average Price and the market price if the latter is not more than 5 per cent. above the Average Price or (iii) in any other case, 115 per cent. of such middle market quotation on the business day next preceding the date of purchase; provided, however, that the limitations in (i), (ii) and (iii) shall apply only so long as the Bonds are listed on the Official List and admitted to trading on the London Stock Exchange’s Professional Securities Market. If purchases are made by tender, tenders must be available to all Bondholders alike. In this sub-paragraph, “business day” means a day on which banks are open for business in the City of London.]13
[The Issuer may at any time purchase Bonds (provided that in the case of Bearer Bonds all unmatured Coupons appertaining thereto are attached thereto or surrendered therewith) in any manner and at any price.]14
(d) Cancellation
(i) All Bonds redeemed as aforesaid pursuant to paragraph (a) or (b) above will be cancelled forthwith, together with in the case of Bearer Bonds all unmatured Coupons surrendered therewith and may not be reissued or resold.
(ii) All Bonds and Coupons purchased pursuant to paragraph (c) above and Bonds exchanged pursuant to the exercise of an Exchange Right (as defined below) may, at the option of the Issuer, be (A) cancelled together with in the case of Bearer Bonds all unmatured Coupons surrendered therewith and accordingly may not be reissued or resold, (B) held by the Issuer, or (C) resold at any time until final maturity and on any terms.
6 PAYMENTS
(a) Payments of principal in respect of Bearer Bonds will be made against surrender of the Bonds at the specified office of any of the Paying Agents outside the United States by (1) transfer to an Australian dollar account maintained by the payee with a bank in the City of London or by Australian dollar cheque mailed to an address, or delivered, outside Australia or (2) in the case of Bonds held by Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), transfer to an Australian dollar account maintained by Euroclear or Clearstream, Luxembourg as Euroclear or Clearstream, Luxembourg may from time to time specify. Payments of interest in respect of Bearer Bonds will be made mutatis mutandis as aforesaid against surrender of Coupons (or, in the case of interest accruing on a Bearer Bond in respect of which a declaration has been made under “Events of Default” below, or in the circumstances referred to in the proviso to paragraph (c) of “Interest” above, against presentation of such Bearer Bond) at any specified office of any Paying Agent outside the United States.
Principal and interest on Registered Bonds will be paid to the persons shown on the register at the close of business on the [sixteenth]15 [eighth]16 17 day (or if that is not a Business Day, the immediately
13 Delete in respect of an original issue. Retain in the case of a further issue where outstanding Bonds of the same Series have this provision. 14 Delete in the case of a further issue where outstanding Bonds of the same series do not have this provision but have the preceding version of “Purchases”. Retain in respect of an original issue. 15 Retain in the case of a further issue where outstanding Bonds of the same Series have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving the alternative set out in (16). 16 Delete in the case of a further issue where outstanding Bonds of the same Series do not have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving this alternative to that set out in (15). 17 An original issue of Bonds may contain either of the alternatives set out in (15) and (16).
36 preceding Business Day) [of the month]15 immediately preceding the due date for any payment of interest in respect of a Registered Bond, such payment may be made by transfer to an Australian dollar account maintained by the payee with a bank [in the City of London]18 [outside Australia]19. As used above, “Business Day” has the meaning provided in paragraph (j) of “Exchange” below.
[Notwithstanding the foregoing, payments of interest or principal in respect of the Bonds or the Coupons may be made by transfer to an Australian dollar account maintained by the payee with a bank in any city outside Australia and the United States of America approved by the Fiscal Agent without liability on its part but after consultation with the Issuer, if such payment by transfer to an Australian dollar account with a bank in the City of London becomes, in the opinion of the Fiscal Agent, inconvenient or undesirable. In such event, all references herein to the City of London shall be deemed to refer to such place where the relevant payment is made by, or on behalf of, the Issuer.]18
If payment of the full amount of principal or interest in respect of the Bonds or the Coupons by any of the methods provided above and/or at all of the specified offices of the Paying Agents or the Transfer Agent or the Bond Registrar, as the case may be, becomes illegal or effectively precluded because of exchange controls or similar restrictions on payment or receipt of such amount in Australian dollars, the Issuer (failing which, the Fiscal Agent on behalf of the Issuer) will appoint and maintain a Paying Agent and/or a Transfer Agent, as appropriate, having a specified office in Australia. Payment by such Paying Agent or the Transfer Agent in Australia will be made in Australian dollars, at the option of the holder, by Australian dollar cheque drawn on, or by transfer to an Australian dollar account maintained by the payee with, a bank in Sydney, Australia. In such event, all references herein to the City of London or any other place where payment is to be made shall be deemed to refer to Sydney, Australia.
Payments of principal and interest in respect of the Bonds are subject in all cases to any fiscal or other laws and regulations applicable thereto, but without prejudice to the provisions of “Taxation” below.
(b) The Issuer reserves the right at any time to vary or terminate the appointment of any Paying Agent, the Exchange Agent, Transfer Agent or the Bond Registrar and/or to appoint additional or other Paying Agents, Exchange Agent, Transfer Agent or Bond Registrar. The Issuer will in all events, so long as any Bond or Coupon remains outstanding, maintain a Paying Agent, Exchange Agent and Transfer Agent in (i) London and (ii) (to the extent not otherwise satisfied by (i)) a Paying Agent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26th-27th November, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive and a Bond Registrar in New York City. Notice of any change in or addition to the Paying Agents or the Exchange Agent or the Bond Registrar or of any change in their specified offices will be given in accordance with “Notices” below.
The current Fiscal Agent, Exchange Agent, Transfer Agent, Bond Registrar and Paying Agents and their respective specified offices are set out at the end of this document.
(c) Bearer Bonds should be presented for redemption together with all unmatured Coupons appertaining thereto, failing which the face value of any missing unmatured Coupons (or, in the case of payment not
18 Retain in the case of a further issue where outstanding Bonds of the same Series have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving the alternative set out in (19). Delete in the case of an original issue or a further issue of Bearer Bonds. 19 Delete in the case of a further issue where outstanding Bonds of the same Series do not have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving this alternative to that set out in (18). Retain in the case of an original issue of Registered or Bearer Bonds or a further issue of Bearer Bonds.
37 being made in full, that proportion of the aggregate amount of such missing unmatured Coupons which the sum of the principal so paid bears to the total principal amount due) will be deducted from the sum due for payment. Any amount so deducted will be paid in Australian dollars against presentation and surrender of the relevant missing Coupon(s) at any time following such deduction but not later than the expiry of the period of five years after the Relevant Date (as defined in “Taxation” below) for the payment of such Coupon(s).
(d) If the due date for payment of any amount of principal or interest in respect of any Bond is not at a particular place of payment a business day, then the holder thereof will not be entitled to payment at such place of payment of the amount due until the next following business day at such place of payment and will not be entitled to any further interest or other payment in respect of any such delay. In this paragraph, “business day” means any day on which banks are open for business in the relevant place of payment and (in the case of payment by transfer to an Australian dollar account as referred to in (a)(1) above and in respect of payments of principal on Registered Bonds) on which dealings in foreign currencies may be carried on in such place of payment, London and the Australian city in which the Fiscal Agent has its Australian dollar account and (in the case of payment by transfer to an Australian dollar account as referred to in (a)(2) above) on which dealings in foreign currencies may be carried on in such place of payment and the Australian city or cities in which the Fiscal Agent, Euroclear and Clearstream, Luxembourg have their Australian dollar accounts. If the Fiscal Agent, Euroclear or Clearstream, Luxembourg maintains an Australian dollar account in Sydney as well as in another Australian city, the relevant city for the purpose of this provision in respect of the Fiscal Agent, Euroclear or Clearstream, Luxembourg (as the case may be) shall be Sydney.
All Registered Bonds delivered in exchange for Bearer Bonds pursuant to Condition 2 will contain the alternative referred to in note 19 above.
Payments in respect of Global Bonds will be subject to the provisions set out under “Special Provisions relating to Global Bonds” below.
7 EXCHANGE
(a) Exchange Right
A Bondholder (an “Exchanging Bondholder”) shall have the right (the “Exchange Right”), subject as provided herein and to any applicable fiscal or other laws and regulations and in the manner as described below, to elect to have his Bonds redeemed by the Issuer at their principal amount and to have the proceeds thereof applied by the Issuer on his behalf in the subscription or purchase at par of a like principal amount of New South Wales Treasury Corporation Inscribed Stock [ ] per cent. due [ ]20 (the “Inscribed Stock”). Exchange Rights may be exercised, in the case of a Bearer Bond, only in respect of the whole of the aggregate principal amount of such Bearer Bond. Exchange Rights may be exercised, in the case of a Registered Bond, in respect of a multiple of an authorised denomination in respect thereof. The Issuer shall be entitled to satisfy its obligations in respect of the exercise of Exchange Rights by either (i) re-issuing outstanding Inscribed Stock, or (ii) issuing previously unissued Inscribed Stock.
20 This will be the Inscribed Stock into which the Bonds are exchangeable.
38 (b) Exchange Period
Exchange Rights shall be exercisable at any time, subject to applicable fiscal or other laws and regulations and save as provided in this paragraph, on and after [ ]21 and up to and including [ ]22 (such period being called the “Exchange Period”).
Exchange Rights may not be exercised:
(i) in circumstances where the Delivery Date (as defined below) in respect of such exercise would otherwise fall after [ ]23 or during the period commencing [on (and including) the seventeenth]24 [at close of business on the eighth]25 26day (or if that is not a Business Day, the immediately preceding Business Day) [of the month]24 immediately preceding each Interest Payment Date and ending on (and including) such Interest Payment Date; or
(ii) in circumstances where the Delivery Date in respect thereof would otherwise fall after the date which is 14 days prior to any date for redemption thereof pursuant to paragraph (b) of “Redemption and Purchase” above, unless there is default in making due payment of all moneys due in respect of all outstanding Bonds on such redemption date, in which event Exchange Rights in respect of such Bonds may be exercised after such redemption date provided that the relevant Delivery Date in respect thereof shall fall not later than the date falling 14 days after that on which, the full amount of such moneys having been paid to the Fiscal Agent, notice shall have been duly given to the Bondholders in accordance with “Notices” below that such payment has been made.
If the Bonds are to be redeemed pursuant to paragraph (b) of “Redemption and purchase” above, the Issuer shall give not less than 14 nor more than 28 days’ prior notice to Bondholders in accordance with “Notices” below of the last Exercise Date in relation to which Exchange Rights may be exercised.
(c) Exchange Notice
To exercise Exchange Rights in respect of Bonds (other than Registered Bonds, including Global Bonds) an Exchanging Bondholder shall deliver to Euroclear or Clearstream, Luxembourg by 10.00 hours (Brussels or Luxembourg time, as the case may be) on any Business Day during the Exercise Period (save as provided herein) a duly completed notice in the then current form obtainable from the specified office of the Exchange Agent (an “Exchange Notice”). Subject to paragraph (g) below, an Exchange Notice once given may not be withdrawn. Such Exchange Notice shall constitute in the case of Bonds (other than Registered Bonds) an irrevocable authority to Euroclear or, as the case may be, Clearstream, Luxembourg to debit the Exchanging Bondholder’s specified securities account with the relevant number of Bonds in respect of which Exchange Rights are being exercised and to deliver such
21 Where interest accrues from a date preceding the date of issue, the date of issue and where interest accrues from a date after the date of issue, from such subsequent date. In the case of a further issue, the first day of the Exchange Period will correspond to the day specified in the original issue of Bonds. 22 In the case of an original issue, the date falling one month and one day prior to the maturity date. In the case of a further issue, the last day of the Exchange Period will correspond to the day specified in the original issue of Bonds. 23 The last day of the Exchange Period (see note 22 above). 24 Retain in the case of a further issue where outstanding Bonds of the same Series have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving the alternative set out in 25. 25 Delete in the case of a further issue where outstanding Bonds of the same Series do not have this provision unless, at the time of issue, an Extraordinary Resolution has been passed by the holders of such outstanding Bonds of the same Series approving this alternative to that set out in 24. 26 An original issue of Bonds may contain either of the alternatives set out in 24 and 25.
39 Bonds to the Exchange Agent by crediting the securities account of the Exchange Agent with such Bonds and, where appropriate, to debit the Exchanging Bondholder’s specified cash account with any amounts payable pursuant to paragraph (e) in immediately available, freely transferable funds and to credit the cash account of the Exchange Agent with such payment.
In the case of Registered Bonds (other than Global Bonds), to exercise Exchange Rights an Exchanging Bondholder shall deliver to the Bond Registrar by 10.00 hours (New York time) on any Business Day during the Exercise Period (save as provided herein) a duly completed Exchange Notice obtainable from the specified office of the Bond Registrar together with the Registered Bond in respect of which the Exchange Rights are being exercised and payment of any sums payable pursuant to (d) and/or (e) below. Subject to paragraph (g) below, an Exchange Notice once given may not be withdrawn. In the case of an exercise of Exchange Rights in respect of less than the whole principal amount of a Registered Bond, a Registered Bond representing the balance thereof will, within three business days of the relevant Delivery Date, be available for delivery at the specified office of the Bond Registrar in the name of the holder, or be mailed at the risk of the holder to such address as may be specified in the relevant Exchange Notice.
Any Exchange Notice received after 10.00 hours (Brussels, Luxembourg or, as the case may be, New York time) on any Business Day shall be deemed to have been delivered on the next following Business Day.
The procedure set out in the first sub-paragraph of paragraph (c) above shall also apply in respect of the exercise of Exchange Rights in respect of International Registered Global Bonds (but not Registered Bonds in definitive form, in respect of which the second sub-paragraph shall apply).
In respect of Bonds represented by a temporary Global Bearer Bond, the completion of an Exchange Notice shall constitute a representation and agreement by the Exchanging Bondholder that no part of his interest in such temporary Global Bond which is the subject of an Exchange Right is beneficially owned by any U.S. person (as defined in the Exchange Notice) or by a person who acquired such interest for resale to any U.S. person.
To exercise Exchange Rights in respect of interests in a DTC Registered Global Bond, the beneficial owner of Bonds must contact the DTC Participant through which it holds its Bonds to obtain an Exchange Notice. The beneficial owner of the Bonds must deliver a duly completed Exchange Notice in respect of the Bonds for which the Exchange Rights are being exercised to the DTC Participant by 10.00 hours (New York City time) on any Business Day during the Exchange Period (save as provided herein and other than the last Business Day of the Exchange Period). An authorised signatory of the DTC Participant shall sign the Exchange Notice and certify as to such beneficial owner’s holding of such Bonds and the name in which the Inscribed Stock is to be registered and forward the duly completed Exchange Notice to the custodian for the DTC Registered Global Bond and Deutsche Bank Trust Company Americas (the “U.S. Exchange Agent”) by 10.00 hours (New York City time) on the next Business Day during the Exchange Period. If applicable, the beneficial owner of the Bonds shall deliver to the U.S. Exchange Agent by such time a cheque made payable to the Issuer for any sums payable pursuant to Condition 7(d) and/or (e). Subject to paragraph (g) below, an Exchange Notice once given may not be withdrawn. Once the DTC Participant receives confirmation from the U.S. Exchange Agent that the Exchange Notice has been received, such DTC Participant will send a free delivery order to the DTC system to deliver the Bonds free of payment from the DTC Participant’s account with DTC to the U.S. Exchange Agent’s account. In the free delivery order the DTC Participant must reference the exchange and the serial number of the Exchange Notice. Upon the receipt of the Exchange Notice, the free delivery of the Bonds and any sums payable pursuant to Condition 7(d) and/or (e), the U.S. Exchange Agent shall instruct the Registry of the Inscribed Stock in
40 Sydney to register the Inscribed Stock in the name of the person specified in the Exchange Notice, shall instruct DTC to withdraw the Bonds from the U.S. Exchange Agent’s account and shall instruct the Custodian to reduce the DTC Registered Global Bond by the amount exchanged for Inscribed Stock. The DTC Participant shall debit the relevant beneficial owner’s account on its records with the amount of the relevant interest in the DTC Registered Global Bond in respect of which the Exchange Rights are being exercised. The Custodian shall also decrease the amount of the DTC Registered Global Bond by an amount equal to the amount of Bonds in respect of which the Exchange Rights are being exercised and DTC will debit the U.S. Exchange Agent’s account on its records with such amount. In order to become a holder of the Inscribed Stock as of any record date with respect to such Inscribed Stock, the Delivery Date relating to such Inscribed Stock must occur prior to the close of business on such record date. Accordingly, the Exchange Notice, the free delivery order and any sums payable pursuant to Condition 7(d) and/or (e) must be received by the U.S. Exchange Agent no later than 10.00 hours (New York City time) on the fifth Business Day preceding such record date (provided that the U.S. Exchange Agent shall have received the free delivery of the relevant number of Bonds from the relevant DTC Participant in respect of the relevant exercise of Exchange Rights by not later that 10.00 hours (New York City time) on the second Business Day after such Exercise Date, or by such later time as the U.S. Exchange Agent and the Issuer may agree). Where such Bonds are not so received, the Delivery Date shall be the third Business Day after such Bonds are so received and any such Bonds received after 10.00 hours (New York City time) on any Business Day will be deemed to have been received on the next succeeding Business Day.
(d) Interest
Each Bearer Bond delivered in respect of the exercise of Exchange Rights will be required to be delivered with all Coupons relating thereto maturing on or after the relevant Delivery Date, failing which such exercise shall be invalid.
In the case of Registered Bonds if the Delivery Date is on or after the Record Date, the Exchanging Bondholder must pay an amount equal to the interest which he will receive in respect of that Record Date.
(e) Stamp and other duties
All stamp duty reserve tax, stamp, transfer and registration duties (if any) arising on exercise of Exchange Rights and/or on the delivery or other disposition of Inscribed Stock by the Issuer to or to the order of the Exchanging Bondholder payable (i) in any jurisdiction in which the relevant Exchange Notice is delivered and (ii) in any jurisdiction, other than the Commonwealth of Australia, in which the register in respect of the Inscribed Stock is located, will be required to be paid by the Exchanging Bondholder as herein provided.
The Issuer will pay or procure that there is paid all stamp duty reserve tax, stamp, transfer and registration duties (if any) arising on exercise of Exchange Rights and/or on the delivery or other disposition of Inscribed Stock by the Issuer to or to the order of the Exchanging Bondholder payable in or under the laws of the Commonwealth of Australia or any State or Territory thereof.
(f) Registration
Subject to satisfaction of the conditions provided herein and subject to paragraph (g) below, the Issuer shall on the relevant Delivery Date redeem the Bonds delivered in exercise of Exchange Rights at their principal amount and apply the proceeds of such redemption on behalf of the Exchanging Bondholder in subscribing or, as the case may be, purchasing at par an equal principal amount of Inscribed Stock and shall procure that the Exchanging Bondholder or his nominee shall be registered at the Registry as
41 the holder of such Inscribed Stock on, and with effect from, such Delivery Date and such Exchanging Bondholder or, as the case may be, his nominee shall for all purposes be deemed to be the holder of such Inscribed Stock with effect from (and such Inscribed Stock shall be deemed to have been issued or reissued on and with effect from) such Delivery Date.
(g) Entitlement
Until such time as the Issuer shall have performed the obligations required to be performed by it by this provision upon the exercise of an Exchange Right, the Exchange Agent (in the case of Bonds (other than Registered Bonds)) or Bond Registrar (in the case of Registered Bonds) shall hold such Bonds or procure that such Bonds are held to or to the order of the relevant Exchanging Bondholder.
If by virtue of any applicable fiscal or other laws or regulations the Issuer is unable, or it is unlawful for it, to comply with its obligations under this provision “Exchange” in respect of Exchange Rights on any Delivery Date the Exchange Agent shall on the Business Day immediately succeeding the Delivery Date, irrevocably authorise Euroclear or Clearstream, Luxembourg, as the case may be, to reverse the relevant transactions described in paragraph (c) above and the Bond Registrar shall return the Registered Bonds and any payment to the Exchanging Bondholder and for all purposes the Exchanging Bondholder shall be deemed never to have exercised the relevant Exchange Rights.
The provision of the second sub-paragraph of paragraph (g) above relating to the reversal of relevant transactions shall also apply in relation to Global Bonds, provided that in the case of DTC Registered Global Bonds, the relevant DTC Participant, DTC and the Custodian shall be deemed to have been instructed to reverse the transaction described in paragraph (c) above if and as soon as the Issuer becomes unable to comply with its obligations in Condition 7 in respect of Exchange Rights on any Delivery Date.
(h) Ranking of Inscribed Stock
Inscribed Stock issued or reissued upon exercise of Exchange Rights will rank equally without preference in all respects and form a single series with the Inscribed Stock in issue on the relevant Delivery Date including all rights to payment of principal, premium (if any) and interest. Inscribed Stock issued or re-issued upon exercise of Exchange Rights will bear interest from and including [ ] [ ],27 or, as the case may be, [ ] [ ]27 immediately preceding the relevant Delivery Date.
(i) Registry and Exchange Agent
The Issuer reserves the right at any time to change the Registry or vary or terminate the appointment of the Exchange Agent. The Issuer will in any event, so long as any Bond remains outstanding, maintain a Registry in Sydney and an Exchange Agent in London. Notice of any change of the Exchange Agent or of any change in the specified office of the Registry or the Exchange Agent will be given in accordance with “Notices” below. The initial Exchange Agent and its specified office is set out at the end of this document.
(j) Definitions
In this provision “Exchange”:
“Business Day” means (a) except in the case of DTC Registered Global Bonds a day on which (i) banks are open for business in London and Sydney and (ii) (in the case of Bonds (other than Registered Bonds)) transactions may be settled through Euroclear and/or Clearstream, Luxembourg, as
27 The interest payment dates of the relevant Inscribed Stock.
42 the case may be, and (iii) (in the case of Registered Bonds) banks are open for business in New York City and (b) in the case of DTC Registered Global Bonds, a day on which (i) banks are open for business in New York and Sydney and (ii) banks are open for business in New York City and transactions may be settled through DTC;
“Delivery Date” means (a) except in the case of DTC Registered Global Bonds, the fifth Business Day after the relevant Exercise Date (provided that the Exchange Agent shall have received relevant details from Euroclear or Clearstream, Luxembourg (in the case of Bonds (other than Registered Bonds)) or the Registrar (in the case of Registered Bonds) in respect of the relevant exercise of Exchange Rights as provided in the Fiscal Agency Agreement by not later than 10.00 hours (London time) on the second Business Day after such Exercise Date, or by such later time as the Exchange Agent and the Issuer may agree) and (b) in the case of DTC Registered Global Bonds, the fifth Business Day after the relevant Exercise Date (provided that the U.S. Exchange Agent shall have received the relevant Bonds from the relevant DTC Participant in respect of the relevant exercise of Exchange Rights by not later than 10.00 hours (New York time) on the second Business Day after such Exercise Date, or by such later time as the U.S. Exchange Agent and the Issuer may agree). Where such Bonds are not received by the time aforesaid, the relevant Delivery Date shall be the third Business Day after such details are so received and any such details received after 10.00 hours (London time, or 10.00 New York time, as applicable) on any Business Day will be deemed to have been received on the next following Business Day;
“Exercise Date” means (a) except in the case of a DTC Registered Global Bond, the day on which a duly completed Exchange Notice is validly delivered or deemed to be delivered to Euroclear or Clearstream, Luxembourg, or to the Bond Registrar as provided herein and (b) in the case of a DTC Registered Global Bond, the day on which a duly completed Exchange Notice, the free delivery order and any sums payable pursuant to Condition 7(d) and/or (e) are validly delivered or deemed to be delivered by the DTC Participant to the U.S. Exchange Agent and the custodian for the DTC Registered Global Bonds;
“Registry” means the offices of Computershare Investor Services Pty Limited, Level 3, 60 Carrington Street, Sydney 2000, New South Wales or other registry located in New South Wales authorised by the Issuer.
8 TAXATION
All payments of principal and interest shall be made free and clear of, and without withholding or deduction for, any present or future taxes or duties of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Commonwealth of Australia or any political subdivision thereof or any authority therein or thereof having power to tax. If any withholding or deduction of such taxes or duties is required by law to be made from any payment by the Issuer, the Issuer shall pay such additional amounts as may be necessary to ensure that the Bondholders and Couponholders receive such amounts as would have been received by them had no such taxes or duties been required to be deducted.
The Issuer shall not be obligated to pay or remit any such additional amounts:
(a) to the Bondholder or Couponholder (or to a third party on behalf of a Bondholder or Couponholder) who is subject to taxation in the Commonwealth of Australia for reasons other than the mere ownership or possession of the Bond or Coupon or the receipt of principal or interest in respect thereof provided that such a holder shall not be regarded as being connected with the Commonwealth of Australia for the reason that such Bondholder or Couponholder is a resident of the Commonwealth of
43 Australia within the meaning of the Income Tax Assessment Act 1936 where, and to the extent that, such tax is payable by reason of Section 128B (2A) of that Act; and/or
(b) to, or to a third party on behalf of, a Bondholder or Couponholder who could lawfully avoid (but has not so avoided) such withholding or deduction by complying or procuring that any third party complies with any statutory requirements or by making, or procuring that any third party makes, a declaration of non-residence or other similar claim for exemption to any tax authority in the place where the relevant Bond or Coupon is presented for payment; and/or
(c) with respect to any Bond or Coupon presented for payment more than 30 days after the Relevant Date except to the extent that the Bondholder or Couponholder thereof would have been entitled to such additional amounts on presenting the same for payment on the last day of such period of 30 days; and/or
(d) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26th-27th November, 2000 on the taxation of savings income or any law implementing or complying with or introduced in order to conform to, such Directive; and/or
(e) with respect to any Bond or Coupon presented for payment by or on behalf of a Bondholder or a Couponholder who would have been able to avoid such withholding or deduction by presenting the relevant Bond or Coupon to another Paying Agent in a Member State of the European Union; [and/or]
(f) to, or to a third party on behalf of, an Australian resident Bondholder or Couponholder, if that person has not supplied an appropriate tax file number, Australian Business Number or details of an applicable exemption from these requirements; [and/or]
(g) [to the Bondholder or Couponholder (or to a third party on behalf of the Bondholder or Couponholder) who is liable to such taxes or duties in respect of such Bond or Coupon by reason of the Bondholder or Couponholder being an associate of the Issuer for the purposes of Section 128F(6) of the Income Tax Assessment Act 1936 of Australia.]28
This Bond must not be purchased by an associate of the Issuer. Where Bonds are not issued so as to be consolidated with and form a single series with Bonds issued before 25th August, 1998, the additional paragraph (g) above should be included in the terms and conditions of those Bonds.
As used herein, the “Relevant Date” in respect of any payment means whichever is the later of (i) the date on which such payment first becomes due, and (ii) if the full amount of the moneys payable has not been unconditionally received by the Fiscal Agent on or prior to such due date, the date on which, the full amount of such moneys having been so received, notice to that effect shall have been duly given in accordance with “Notices” below.
References herein to principal and interest on the Bonds shall be deemed to include any additional amounts which may be payable under this paragraph “Taxation”.
9 EVENTS OF DEFAULT
If one or more of the following events (below called “Events of Default”) shall have occurred and be continuing, that is to say:
28 Delete if series to be fungible with pre August, 1998 Series.
44 (a) default by the Issuer in the payment when due of the principal or interest in respect of any Bond and such default shall not have been remedied by the Issuer within 14 days after written notice of such default has been given to the Fiscal Agent by the holder of any Bond; or
(b) the Issuer shall fail duly to perform or observe any other term, covenant or agreement contained in the Bonds, and such failure continues for a period of 30 days after the date on which written notice of such failure, requiring the Issuer to remedy the same, shall first have been given to the Fiscal Agent by the holder of any Bond at the time outstanding; or
(c) any indebtedness for borrowed moneys of the Issuer in an amount exceeding ten million Australian dollars (A$10,000,000.00) or its equivalent shall become due and payable prior to its stated maturity and shall not be paid within five business days thereafter or shall not be paid at the maturity thereof or within five business days after the expiration of any period of grace which may be given in relation thereto, unless the obligation to pay any such indebtedness is being contested by the Issuer by appropriate proceedings on reasonable grounds and in good faith and the Issuer has certified to such effect to the Fiscal Agent in writing (setting out in such certificate reasonable details of the grounds on which such obligation is being contested); or
(d) if the Issuer ceases to be a corporate or other entity validly constituted and existing under the Treasury Corporation Act 1983 of the State of New South Wales or any re-enactment thereof or if any other legislation, action or proceeding is validly enacted, taken or instituted by any person or the Government of the Commonwealth of Australia or the State of New South Wales or any governmental or other authority which results in the Issuer ceasing to carry on its business or any substantial part thereof or its establishment or any substantial part thereof being suspended, revoked or repealed, unless:
(i) the legislation, action or proceeding also results or some other legislation results in a statutory body of The Crown in Right of New South Wales or any other body corporate (provided that such statutory body or body corporate enjoys no less financial support from The Crown in Right of New South Wales than that enjoyed by the Issuer) succeeding to all powers and any assets and revenues necessary for such statutory body or body corporate to perform the obligations of the Issuer under the Bonds and Coupons;
(ii) such statutory body or other body corporate executes such documents and does all such other acts and things as shall be necessary for it to assume the obligations of the Issuer under the Bonds and Coupons as if such statutory body or other body corporate was named therein as the Issuer; and
(iii) a guarantee of The Crown in Right of New South Wales is accorded to such statutory body or body corporate in like manner as the Guarantee is accorded to the Issuer and is applicable to the obligations of the Issuer under the Bonds and Coupons assumed by such statutory body or body corporate; or
(e) for any reason the Guarantee by The Crown in Right of New South Wales pursuant to Section 22A(1) of the PAFA Act of the due repayment of the principal of the Bonds and the due payment of interest in respect of the Bonds and other charges relating to the borrowing by the Issuer evidenced by the Bonds ceases to be a valid and binding obligation of The Crown in Right of New South Wales or it for any reason becomes unlawful for The Crown in Right of New South Wales to perform its obligations under such Guarantee and the Guarantee is not forthwith replaced by another Guarantee by the Guarantor on terms and conditions which are the same or have substantially the same financial effect as the Guarantee provided by the Guarantor referred to in “Status and guarantee” above,
45 then in any such event the holder of any Bond (in the case of paragraph (a), who has given notice of such failure to the Fiscal Agent) may, by written notice to the Issuer at the specified office of the Fiscal Agent, effective upon receipt of such notice by, and in the case of a Bearer Bond the presentation of any such Bond or the Registered Bond, as the case may be, to, the Fiscal Agent, declare the principal of and all interest then accrued on such Bond to be forthwith due and payable, whereupon the same shall become immediately due and payable without other presentment, demand, protest or other notice of any kind, all of which the Issuer expressly waives, anything contained in the Bond or the terms and conditions thereof to the contrary notwithstanding, unless prior to the time when the Fiscal Agent received such notice and the Fiscal Agent was presented such Bonds as aforesaid, all Events of Default in respect of all the Bonds shall have been cured. If any Bond becomes so due and payable, such Bond will continue to bear interest in accordance with the provisions of “Interest” above which will continue to apply. In this paragraph, “business day” means a day on which banks are open for business in Sydney.
10 PRESCRIPTION
Claims against the Issuer for the payment of principal and interest in respect of the Bonds shall be prescribed unless made within 10 years (in the case of principal) and five years (in the case of interest) from the appropriate Relevant Date.
11 REPLACEMENT OF BONDS AND COUPONS
Should any Bond or Coupon be mutilated, defaced, destroyed, stolen or lost, it may be replaced at the office of the Paying Agent from time to time in London (in the case of Bearer Bonds and Coupons) and the Transfer Agent in London or the Bond Registrar in New York (in the case of Registered Bonds) upon payment by the claimant of the expenses incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Bonds or Coupons must be surrendered before replacements will be issued.
12 MEETINGS OF BONDHOLDERS
The Fiscal Agency Agreement will contain provisions for convening meetings of the Bondholders to consider any matter affecting their interests, including modifications by Extraordinary Resolution (as defined in the Fiscal Agency Agreement) of the Bonds (including their terms and conditions) and the Coupons. An Extraordinary Resolution duly passed at any such meeting shall be binding on all the Bondholders, whether present or not, and on all the Couponholders except that any modification, inter alia postponing the date of maturity of the Bonds or any date for payment of interest in respect thereof, or reducing or cancelling the amount of principal or the rate of interest payable in respect of the Bonds or the Coupons, will only be binding if passed at a meeting of Bondholders (or at any adjournment thereof) at which a special quorum (provided for in the Fiscal Agency Agreement) is present.
13 SUBSTITUTION
The Issuer may, without the consent of the Bondholders and Couponholders, be replaced as principal debtor under the Bonds and Coupons by a successor statutory body, constituted by public Act of the State of New South Wales, which by the provisions of the Act by which it is constituted assumes all of the obligations of the Issuer under the Bonds and Coupons so long as (i) all necessary governmental and regulatory consents and approvals have been obtained for such substitution, (ii) the interests of the Bondholders and Couponholders are not in any way prejudiced by such substitution and (iii) the Guarantee of the Bonds and Coupons remains in full force and effect and the Bondholders and Couponholders remain entitled to the full benefit of the Guarantee in accordance with Section 22A(1) of the PAFA Act.
46 14 NOTICES
Notices to holders of Registered Bonds will be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday after the date of mailing. In the case of a joint holding of a Registered Bond, notice will be valid if given to the holder first appearing in the Register.
All notices to holders of Bonds (other than Registered Bonds) will be valid if published, where practicable, in the English language in a leading daily newspaper of general circulation in London. It is expected that such notices will normally be published in the Financial Times in London. If at any time such publication is not practicable, notices will be valid if published in another leading daily newspaper with general circulation in Western Europe. Such notices shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication shall have been made in the newspaper or newspapers in which publication is required.
15 JUDGMENT CURRENCY
The Issuer will agree to indemnify the Bondholders and the Couponholders against any loss incurred by any Bondholder or Couponholder if, as a result of the filing of any proof or proofs in the dissolution of the Issuer, any judgment or order being given or made by any court for the payment of any amount due under any Bond or Coupon or for any other reason, any Bondholder or Couponholder receives or recovers any amount in a currency other than Australian dollars and, as a result of any variation having occurred in rates of exchange between the date as of which the Australian dollar amount is (or is to be treated as) converted for the purposes of such filing, judgment, order or other reason and the date of actual payment thereof, the actual amount so received or recovered falls short of the amount in Australian dollars which would otherwise have been due under the Bonds or Coupons. The foregoing indemnity shall constitute a separate obligation of the Issuer and shall apply irrespective of any indulgence granted to the Issuer from time to time and shall continue in full force and effect notwithstanding any such filing, judgment, order or other reason as aforesaid.
16 FURTHER ISSUES
The Issuer shall be at liberty from time to time without the consent of the Bondholders or Couponholders to create and issue further bonds so that the same shall be consolidated and form a single issue with the Bonds. The Fiscal Agency Agreement contains provisions for convening a single meeting of the Bondholders and holders of such further bonds. In such case, the expression “Bonds” in these terms and conditions, unless the context otherwise requires, shall include any further bonds issued pursuant to this paragraph and forming a single series with the Bonds.
17 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any term or condition of the Bonds or the Coupons under the Contracts (Rights of Third Parties) Act 1999.
18 GOVERNING LAW
The Bonds, the Coupons and the Fiscal Agency Agreement will be governed by and construed in accordance with the laws of England, and the Guarantee is governed by the laws of New South Wales. The Issuer will, for the benefit of the Fiscal Agent, the Paying Agents, the Exchange Agent, the Transfer Agent, the Bond Registrar and each of the Bondholders and Couponholders, irrevocably submit to the jurisdiction of the courts of England and the courts of New South Wales and the courts of appeal therefrom for all purposes in relation to the Bonds, the Coupons and the Fiscal Agency Agreement and will appoint Hackwood Secretaries Limited
47 presently at One Silk Street, London EC2Y 8HQ as its agent to receive service of process in any action based on any of the Bonds or the Coupons or the Fiscal Agency Agreement which may be instituted in England.
If at any time the Issuer shall cease to have an agent for service of process in London it shall forthwith appoint another agent in London and shall within 14 days of such appointment give notice thereof to the Bondholders. Failing such an appointment within 15 days, the Fiscal Agent shall appoint an agent for service of process having a specified office in London. Nothing herein shall affect the right to serve process in any other manner permitted by law.
The Issuer will acknowledge that, in issuing the Bonds and the Coupons, it is acting in a private and commercial capacity and will to the fullest extent permitted by law (i) irrevocably waive and agree not to claim any immunity it or any of its property may have or hereafter acquire either from jurisdiction in any proceedings brought in any court in respect of the Bonds or the Coupons (as the case may be) or from attachment or the giving of any relief, the issue of any process or the execution of any judgment and (ii) consent generally in respect of any legal action or proceeding arising out of or in connection with the Bonds or the Coupons (as the case may be) to relief being given against it, and to its property being subject to any process for the enforcement of a judgment or any process effected in the course or as a result of any action in rem.
The waiver of immunity in the above paragraph is subject to Section 7(2) of the CPA which prevents execution, attachment or similar process being issued out of any Australian court against the Issuer or any property of the Issuer. However, under Section 7(1) of that Act, the Treasurer of New South Wales shall pay (out of any money legally available) all money payable by the Issuer under any judgment of any competent court, including any interest, except to the extent that the money is paid by some person other than the Treasurer. That Act does not affect the charge created on the income and revenue of the Issuer by virtue of Section 22C(1) of the PAFA Act referred to in the first paragraph under “Status and guarantee” above.
48 SPECIAL PROVISIONS RELATING TO GLOBAL BONDS
General - DTC Registered Global Bonds
Upon the issuance of a DTC Registered Global Bond, DTC or its custodian will credit, respectively, on its book entry registration and transfer system, the respective principal amount of the individual beneficial interests represented by such DTC Global Registered Bond to the accounts of the persons who have accounts with DTC or its nominee. Ownership of beneficial interests in a DTC Global Registered Bond will be limited to persons that have accounts with DTC or its nominee (“DTC Participants”) or persons that may hold interests through DTC Participants. In addition, ownership of a beneficial interest in such DTC Global Registered Bond will be evidenced only by, and the transfer of that ownership interest will be effected only through, records maintained by DTC or its nominee for such DTC Registered Global Bond. Ownership of a beneficial interest in such a DTC Registered Global Bond by persons that hold through DTC Participants will be evidenced only by, and the transfer of that ownership interest within such DTC Participant will be effected only through, records maintained by such DTC Participant. Payments, transfers, exchanges and other matters relating to beneficial interests in a DTC Registered Global Bond may be subject to various policies and procedures adopted by DTC and DTC Participants from time to time. None of the Issuer, the Fiscal Agent, nor any of their agents will have any responsibility or liability for any aspect of DTC’s or any DTC Participant’s records relating to, or for payments made on account of, beneficial interests in a DTC Registered Global Bond, or for maintaining, supervising or reviewing any records relating to such beneficial interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on behalf of indirect participants in certain banks, the ability of a person having a beneficial interest in a DTC Registered Global Bond to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, transfer or pledge beneficial interests in a DTC Registered Global Bond.
The Issuer believes that upon the issuance of a DTC Registered Global Bond, and the deposit of such DTC Registered Global Bond with DTC, DTC or its custodian will immediately credit, on its book entry registration and transfer system, the respective principal amounts of the Bonds represented by such DTC Registered Global Bond to the accounts of DTC Participants. DTC will have no knowledge of the actual holder of beneficial interests in any DTC Registered Global Bond and its records reflect only the identity of the DTC Participants to whose accounts interests in such DTC Registered Global Bond are credited. The DTC Participants remain responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered holder of a DTC Registered Global Bond, DTC or such nominee, as the case may be, will be considered the sole holder of the Bonds represented by such DTC Registered Global Bond for all purposes under the Fiscal Agency Agreement, the terms of the DTC Registered Global Bond and the Guarantee. Except as provided below, owners of beneficial interests in a DTC Registered Global Bond will not be entitled to have the Bonds represented by such DTC Registered Global Bond registered in their names and will not receive or be entitled to receive physical delivery of the Bonds in definitive form and will not be considered the holders thereof under the Fiscal Agency Agreement, the terms of the DTC Registered Global Bond and the Guarantee. Accordingly, each person owning a beneficial interest in such a DTC Registered Global Bond must rely on the procedures of DTC and, if such person is not a DTC Participant, on the procedures of the DTC Participant (and any intermediary in the chain between the DTC Participant and such person) through which such person owns its interest, to exercise any rights of a holder of Bonds under the Fiscal Agency Agreement or the terms of the DTC Registered Global
49 Bond or the Guarantee. In addition, no beneficial owner of an interest in a DTC Global Bond will be able to transfer that interest except in accordance with DTC’s applicable procedures (in addition to those under the Fiscal Agency Agreement referred to herein). Pursuant to the Fiscal Agency Agreement, DTC or its nominee (as the holder of DTC Registered Global Bonds) may grant proxies and otherwise authorise DTC Participants (or persons holding beneficial interests in a DTC Registered Global Bond through such Participants) to exercise any rights of a holder or to take any other actions which a holder is entitled to take under the Fiscal Agency Agreement, the terms of the DTC Registered Global Bond or the Guarantee. The Issuer understands that under existing industry practices, in the event that the Issuer requests any action of holders of Bonds or that an owner of a beneficial interest in a DTC Registered Global Bond desires to exercise any rights of a holder or to take any action which a holder is entitled to exercise or take under the Fiscal Agency Agreement or the terms of the DTC Registered Global Bond or the Guarantee, DTC would authorise the DTC Participants holding the relevant beneficial interests to exercise such rights or take such action, and such DTC Participants would authorise beneficial owners owning through such DTC Participants to exercise such rights or take such action or would otherwise act upon the instructions of beneficial owners owning through them.
Unless and until it is exchangeable in whole or in part for a Bond or Bonds in definitive form, no DTC Registered Global Bond may be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor of DTC or a nominee of such successor.
Exchange for Definitive Bonds
DTC Registered Global Bonds: If (i) DTC has notified the Issuer that it is unwilling or unable to continue as the depositary for any DTC Registered Global Bond and a successor depositary is not appointed by the Issuer within 90 days after receiving such notice or DTC ceases to be a Clearing Agency (as defined below) or (ii) in the Issuer’s reasonable opinion, the Issuer would suffer a material disadvantage in respect of the Bonds as a result of a change in the laws or regulations (taxation or otherwise) of any jurisdiction referred to in Condition 8 which would not be suffered were the Bonds in definitive form, the Issuer will issue Definitive Registered Bonds in exchange for such DTC Registered Global Bond. Such Definitive Registered Bond or Bonds will be registered in the names, and issued in any approved denominations, requested by DTC and shall bear the legend referred to under “Transfer and Settlement of Interests in Global Bonds — Restrictions on Transfer”. Subject to the provisions of such legend, the holder of such Definitive Registered Bond may transfer such Bond in the manner set out in Condition 2(b). Upon the transfer, exchange or replacement of Definitive Registered Bonds not bearing the legend referred to under “Transfer and Settlement of Interests in Global Bonds — Restrictions on Transfer”, the Issuer shall deliver Definitive Registered Bonds that do not bear the legend. Upon the transfer, exchange or replacement of Definitive Registered Bonds bearing the legend, or upon specific request for removal of the legend on a Definitive Registered Bond, the Issuer shall deliver only Definitive Registered Bonds that do not bear such legend, or shall refuse to remove such legend, as the case may be, unless there is delivered to the Issuer such satisfactory evidence, which may include an opinion of counsel, as may reasonably be required by the Issuer that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act. If a legend is removed from a Definitive Registered Bond and such Definitive Registered Bond is subsequently held by an affiliate of the Issuer, the legend shall be reinstated. If a holder of a Definitive Registered Bond requests that such Definitive Registered Bond be transferred to DTC so that such holder’s ownership interest in such Definitive Registered Bond will consist of an interest in a DTC Registered Global Bond, the Issuer shall effect such transfer only if the holder shall have established to the reasonable satisfaction of DTC and the Issuer that such holder is qualified to hold such Definitive Registered Bond through a Participant in the DTC System. Upon such transfer the DTC Registered Global Bond will be increased by the principal amount of the Definitive Registered Bonds so transferred.
50 International Registered Global Bonds: If (i) Euroclear and/or Clearstream, Luxembourg has notified the Issuer that it is unwilling or unable to continue as a clearing system for any International Registered Global Bond and a successor clearing system is not appointed by the Issuer within 90 days after receiving such notice, or (ii) in the Issuer’s reasonable opinion, the Issuer would suffer a material disadvantage in respect of the Bonds as a result of a change in the laws or regulations (taxation or otherwise) of any jurisdiction referred to in Condition 8 which would not be suffered were the Bonds in definitive form, the Issuer will issue Definitive Registered Bonds in exchange for such International Registered Global Bond.
Notices
Notices required to be given to the holders of DTC Registered Global Bonds may be given by their being delivered to DTC or any successor depositary, rather than by publication as required by the terms and conditions of the Bonds.
Notices required to be given to the holders of International Registered Global Bonds may be given by their being delivered to Euroclear, Clearstream, Luxembourg or, as the case may be, their respective successor clearing systems, rather than by publication as required by the terms and conditions of the Bonds.
Prescription
Claims in respect of principal and interest in respect of any Global Bond will become void unless it is presented for payment within a period of 10 years (in the case of principal) and five years (in the case of interest) from the appropriate Relevant Date (as defined in Condition 8 of the terms and conditions of the Bonds).
Meetings
Unless it represents only one Bond the holder of any Global Bond shall be treated as two persons for the purposes of any quorum requirements of a meeting of Bondholders and, at any such meeting, as having one vote in respect of each A$1,000 in principal amount of Bonds for which the Global Bond may be exchanged.
Default
If the holder of a Global Bond gives notice of an Event of Default pursuant to the Conditions or a definitive Bond required to be issued in exchange for an interest in a Global Bond is not issued and delivered within six days of the due date therefor, the Global Bond will become void (except in so far as it relates to the Exchange Right (as defined in the Global Bond)) and the persons entitled to the Global Bond as accountholders with or participants in a clearing system will acquire direct enforcement rights against the Issuer under further provisions of the relevant Global Bond executed by the Issuer as a deed poll.
Payment
The following describes the procedure for payments in respect of Bonds represented by a Global Bond:
(a) Persons holding Bonds through DTC:
Payments of principal and interest on Bonds represented by any DTC Registered Global Bond registered in the name of or held by DTC or its nominee will be made only in Australian dollars to or as directed by DTC or its nominee, as the case may be, as the registered owner and holder of such DTC Registered Global Bond. Payments of principal and interest on the Bonds represented by a DTC Registered Global Bond will be made to the order of Cede & Co., as nominee for DTC, which will be
51 the registered holder of each DTC Registered Global Bond. Cede & Co. has given instructions to the Issuer not to make such payments to Cede & Co.’s account but, instead, in accordance with the written instructions of the DTC Participants to whose accounts such Bonds are registered or credited at DTC on the Record Date relating to such payments. The Fiscal Agent shall make payments of principal and interest to any DTC Participant only if the principal amount of Bonds referenced in such DTC Participant’s payment instructions match such DTC Participant’s position on DTC’s security position listing as of the relevant record date. In the event that the principal amount of Bonds referenced in such payment instructions does not match the position in DTC’s security position listing as of such record date, the Fiscal Agent will not make payment until such DTC Participant amends its payment instructions in the manner described below to match such DTC Participant’s position in DTC’s security position listing as of such record date. In no event shall the Issuer, the Fiscal Agent or any of their agents have any liability whatsoever to any such DTC Participant or any beneficial owner of Bonds holding through such DTC Participant for any loss incurred as a result of such failure of the principal amount of the Bonds referenced in such DTC Participant’s payment instructions to match such DTC Participant’s position on DTC’s security position listing as of such record date. In addition, none of the Issuer, the Fiscal Agent or the Paying Agents or any other agent of the Issuer or the Fiscal Agent will have any responsibility or liability for any aspect of DTC’s records or any DTC Participant’s records relating to, or payments made on account of, beneficial ownership interests in a DTC Registered Global Bond or for maintaining, supervising or reviewing any of DTC’s records or any DTC Participant’s records relating to such beneficial ownership interest.
In order for a beneficial holder of Bonds held through DTC to receive any payments of principal of or interest on the Bonds, a DTC Participant must, on its behalf, submit written payment instructions to the Fiscal Agent for payments to be made by wire transfer to an Australian dollar account or accounts maintained by the DTC Participant with a bank outside Australia or by cheque mailed to an address outside Australia not later than the first New York business day after the record date relating to the payment of such principal or interest. All payment instructions must include the DTC Participant’s account number and the principal amount of the Bonds held by it and the beneficial owners on behalf of whom such payment instructions are given. Each DTC Participant holding a beneficial interest in a DTC Registered Global Bond will be required to provide standing payment instructions to the Fiscal Agent at the time the Bonds represented by such interest in the DTC Registered Global Bond are credited to the account or accounts held by such DTC Participant at DTC. In addition, standing payment instructions must be provided by a transferee DTC Participant in connection with any transfer of an interest in a DTC Registered Global Bond from the account of a DTC Participant to the account of another DTC Participant. Payment instructions given by a DTC Participant shall remain effective for the purpose of all payments due under the Bonds credited to the account of such DTC Participant until such time as the Fiscal Agent shall receive written instructions from such DTC Participant indicating a different account or accounts or, as the case may be, a different address or addresses to which such payments are to be made or mailed, as applicable. With respect to any payment of interest or principal on the Bonds, the Fiscal Agent shall make payments to the account or accounts, or mail payments to the address or addresses, as applicable, indicated in the most recent written payment instructions received by it from each DTC Participant to which an interest in a DTC Registered Global Bond is credited; provided, however, that (a) the Fiscal Agent shall not make such payments if the account or accounts to which they are to be made or the address or addresses to which the cheques for such payments are to be sent are in Australia and (b) any amendment to the standing payment instructions of any DTC Participant received by the Fiscal Agent after the first New York business day after a Record Date in respect of a payment of principal or interest shall not be effective as to such payment of principal or interest but shall become effective with respect to the next succeeding payment of interest or principal unless subsequently modified by written instruction delivered to the
52 Fiscal Agent by such DTC Participant. In the event that a DTC Participant shall fail to deliver payment instructions to the Fiscal Agent as described herein, the Fiscal Agent shall retain the amounts payable to such DTC Participant until such time as such DTC Participant shall provide payment instructions to the Fiscal Agent in the manner described herein. Upon receipt of such instructions, the Fiscal Agent shall make or mail such payments of principal or interest in the manner described above. Neither the Issuer, the Fiscal Agent nor any of their agents shall have any liability whatsoever to any DTC Participant or any beneficial owner of Bonds holding through such DTC Participant for any loss incurred as a result of the failure of such DTC Participant to provide instructions to the Fiscal Agent in the form described herein and in time for payments to be made in the manner, and within the time periods, described herein and the Fiscal Agent is entitled to rely on the accuracy of any DTC Participant’s written instructions and shall have no duty to verify or investigate those instructions.
(b) Persons holding Bonds through Euroclear and Clearstream, Luxembourg:
A Euroclear holder or Clearstream, Luxembourg holder of Bonds represented by an International Registered Global Bond will receive payment on such Bonds in Australian dollars outside Australia through Euroclear or Clearstream, Luxembourg, as the case may be, in accordance with their usual procedures.
(c) Record dates:
Payments of principal and interest in respect of DTC Registered Global Bonds will be made by the Fiscal Agent in accordance with the payment instruction referred to in paragraph (i) above. Payments of principal and interest in respect of International Registered Global Bonds will be made outside Australia by Euroclear or Clearstream, Luxembourg to those persons that appear on the records of Euroclear or Clearstream, Luxembourg, as the case may be, on their normal record dates and in accordance with their normal procedures.
DTC is a limited purpose trust company organised under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934 (a “Clearing Agency”). DTC was created to hold securities for its DTC Participants and facilitate the clearance and settlement of securities transactions between Participants through electronic book-entry changes in accounts of its Participants, thereby eliminating the need for physical movement of certificates. DTC Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organisations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain custodial relationships with a DTC Participant, either directly or indirectly.
53 TRANSFER AND SETTLEMENT OF INTERESTS IN GLOBAL BONDS
General
Secondary market sales of Bonds held through Euroclear or Clearstream, Luxembourg to purchasers of Bonds through Euroclear and Clearstream, Luxembourg will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream, Luxembourg. For Bonds held in Euroclear, secondary market sales in the “ex” period, that is between the record date and interest payment date, will be traded “ex” interest and will not be subject to coupon compensation. Secondary market sales of Bonds between DTC users will be conducted according to the rules and procedures applicable to securities eligible for DTC’s Same Day Funds Settlement (“SDFS”) System. Secondary market sales of Bonds within DTC will only be conducted in accordance with Rule 144A under the Securities Act.
Cross-Market Transfers
Subject to compliance with the provisions of the Fiscal Agency Agreement and the transfer restrictions applicable to the Bonds described below and under “Restrictions on Transfer”, cross-market transfers between DTC, on the one hand, and Euroclear or Clearstream, Luxembourg, on the other, will be effected in DTC and Euroclear or Clearstream, Luxembourg, as the case may be, in accordance with the rules and procedures, and within the established deadlines, of DTC and Euroclear or Clearstream, Luxembourg, as the case may be. Secondary cross-market trading between Euroclear and Clearstream, Luxembourg participants and DTC Participants will be effected on a book entry delivery free of payment basis between the custodian of the DTC Registered Global Bonds and the common depositary for Euroclear and Clearstream, Luxembourg. DTC and Euroclear or Clearstream, Luxembourg, as the case may be, will, if the transaction meets its settlement requirements, take (or in the case of Euroclear or Clearstream, Luxembourg, instruct its respective depositary to take) action to effect settlement on its behalf by delivering or receiving instructions to credit or debit interests, as the case may be, in the DTC Registered Global Bond and the International Registered Global Bond, respectively. Euroclear and Clearstream, Luxembourg participants may not deliver instructions directly to the common depositary for Euroclear and Clearstream, Luxembourg.
Because of time-zone differences, the securities account of a Euroclear or Clearstream, Luxembourg participant purchasing an interest in a DTC Registered Global Bond from a DTC Participant is unlikely to be credited before the second securities settlement processing business day after the DTC settlement date. Such credits of any transactions in interests in a DTC Registered Global Bond settled during such processing will be reported to the relevant Clearstream, Luxembourg or Euroclear participant on such business day.
Although DTC, Euroclear and Clearstream, Luxembourg have agreed to the foregoing procedures in order to facilitate transfers of interests in DTC Registered Global Bonds among participants of DTC, Euroclear and Clearstream, Luxembourg, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Issuer nor the Fiscal Agent will have any responsibility for the performance by DTC, Euroclear or Clearstream, Luxembourg or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Restrictions on Transfer
Each DTC Registered Global Bond will be subject to certain restrictions on transfer set forth therein and in the Fiscal Agency Agreement and described herein. Prior to initial settlement of Bonds to be distributed through DTC, each purchaser electing to hold Bonds through DTC (including a purchaser of an interest in an
54 International Registered Global Bond electing to take delivery in the form of an interest in a DTC Registered Global Bond) will be required to certify its qualification as a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act. Secondary market sales of Bonds within DTC will only be conducted in accordance with Rule 144A under the Securities Act. In addition, beneficial interests in a DTC Registered Global Bond may be transferred to a person who takes delivery in the form of an interest in an International Registered Global Bond only upon receipt by the Fiscal Agent of a written certification (in the form(s) provided in the Fiscal Agency Agreement) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 under the Securities Act. Each DTC Registered Global Bond will bear the following legend regarding such restrictions:
THIS GLOBAL BOND AND THE BONDS REPRESENTED HEREBY (OR ITS OR THEIR PREDECESSOR(S)) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE EXEMPTION PROVIDED BY RULE 144A UNDER THE ACT MAY BE AVAILABLE TO PERMIT THE SALE OR TRANSFER OF THIS GLOBAL BOND OR AN INTEREST HEREIN TO QUALIFIED INSTITUTIONAL BUYERS (WITHIN THE MEANING OF RULE 144A) WITHOUT REGISTRATION.
EACH PURCHASER OF THIS GLOBAL BOND OR AN INTEREST HEREIN REPRESENTS TO THE ISSUER THAT SUCH PURCHASER WILL NOT SELL OR OTHERWISE TRANSFER THIS GLOBAL BOND OR AN INTEREST HEREIN OR INSCRIBED STOCK (AS DEFINED HEREIN) RECEIVED UPON EXCHANGE OF THIS GLOBAL BOND OR AN INTEREST HEREIN (WITHOUT THE CONSENT OF THE ISSUER) PRIOR TO TWO YEARS FROM THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS GLOBAL BOND OR THE BOND OR BONDS REPRESENTED BY SUCH INTEREST (OR ITS OR THEIR PREDECESSORS) BY THE ISSUER OR THE DATE ON WHICH THIS GLOBAL BOND OR SUCH BOND OR BONDS REPRESENTED HEREBY WERE LAST HELD BY AN AFFILIATE OF THE ISSUER OTHER THAN (I) TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A, (II) TO A NON-U.S. PERSON IN A TRANSACTION COMPLYING WITH REGULATION S UNDER THE ACT OR (III) FOLLOWING TWO YEARS FROM SUCH TIME, IN A TRANSACTION COMPLYING WITH RULE 144 UNDER THE ACT.
THIS BOND MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR BONDS REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN AND IN THE FISCAL AGENCY AGREEMENT. EVERY BOND AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS BOND SHALL BE A GLOBAL BOND SUBJECT TO THE FOREGOING, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN AND IN THE FISCAL AGENCY AGREEMENT. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORISED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER OR EXCHANGE OR BY AN AUTHORISED REPRESENTATIVE OF A DTC PARTICIPANT FOR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORISED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORISED REPRESENTATIVE OF A DTC PARTICIPANT), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
55 TAXATION AND APPROVALS
Australian Taxation and Approvals
The following is a general description of the Australian income tax consequences of the acquisition, ownership and disposal of, and the receipt of payments in respect of, the Bonds and Inscribed Stock for holders who are non-residents of Australia and do not acquire, own or dispose of, or receive payments in respect of, the Bonds and Inscribed Stock in carrying on business at or through a permanent establishment in Australia. The comments below are included herein solely for informational purposes and are not intended, nor should they be construed to be, legal or tax advice. They do not purport to be a complete technical analysis of all potential Australian tax implications of non-residents holding the Bonds or Inscribed Stock. Potential holders of the Bonds or Inscribed Stock (“Holders”) should seek their own professional advice as to the Australian tax implications in light of their own specific circumstances.
Section 128F
The Issuer has been advised that in relation to Bonds or Inscribed Stock issued by it at the date of this Offering Circular, subject to satisfaction of the requirement for an exemption from interest withholding tax under Section 128F of the Income Tax Assessment Act of 1936 (as amended) (the “Tax Act”) of the Commonwealth of Australia, a Holder who is not a resident of Australia within the meaning of the Tax Act and who does not carry on business at or through a permanent establishment in Australia and who has acquired or thereafter acquires any of the Bonds or Inscribed Stock outside Australia will not incur any Australian tax in respect of any interest payments or payments in the nature of interest under the Bonds or Inscribed Stock made outside Australia.
If the requirements for an exemption from interest withholding tax (“IWT”) under Section 128F of the Tax Act are not satisfied, IWT would be payable at the rate of 10 per cent. on any payment of interest or an amount in the nature of interest to a non-resident of Australia (as defined in the Tax Act) made under the Bonds or Inscribed Stock unless the Bonds or Inscribed Stock are held in connection with a permanent establishment of the non-resident in Australia.
In summary, the withholding tax exemption in Section 128F will apply in respect of Bonds or Inscribed Stock issued by the Issuer if:
(1) the Issuer is a resident of Australia when it issues the Bonds or Inscribed Stock and when interest on those Bonds or Inscribed Stock is paid. For these purposes, section 128F(7) treats an Australian State or an authority of a State as a company and a resident of Australia; and
(2) the issue of the Bonds or Inscribed Stock satisfies the public offer test.
A number of aspects of Section 128F are discussed below.
It should be noted that the exception in Section 128F is only available in respect of “interest” for Australian income tax purposes. If Bonds or Inscribed Stock are issued on terms such that they are treated as “equity interests” for Australian tax purposes, payments of interest on them would be treated as dividends (and not interest) for Australian tax purposes and may be subject to Australian dividend withholding tax. However, the Issuer intends to issue Bonds and Inscribed Stock on terms such that they should not constitute equity interests for Australian tax purposes.
56 Public Offer Test
There are five categories of debenture issues which satisfy the public offer test. The Issuer will need to satisfy only one of the categories in order to satisfy the public offer test.
In the case of a debenture issued in the form of a definitive Bond or Inscribed Stock, the public offer test will be satisfied if the issue resulted from the debenture being offered for issue:
(a) to at least 10 persons each of whom was carrying on a business of providing finance or investing or dealing in securities in the course of operating in financial markets. In order to satisfy the test, it is also required that the 10 persons are not known or suspected by the Issuer to be associates (as defined in Section 128F of the Tax Act) of each other; or
(b) to at least 100 persons whom it was reasonable for the Issuer to have regarded as either having acquired debentures in the past or being likely to be interested in acquiring debentures; or
(c) as a result of being accepted for listing on a stock exchange, where the Issuer had previously entered into an agreement with a dealer, manager or underwriter in relation to the placement of debentures, requiring the company to seek such listing; or
(d) as a result of negotiations being initiated publicly in electronic form or in another form, that was used by financial markets for dealing in debentures; or
(e) to a dealer, manager or underwriter, in relation to the placement of debentures, who under an agreement with the Issuer, offered the debenture for sale within 30 days in a way covered by any of paragraphs (a) to (d) above.
In the case of a debenture issued in the form of a Global Bond, the issue of the debenture will satisfy the public offer test if:
(1) it describes itself as a global bond or note; and
(2) it is issued to a clearing house or to a person as trustee or agent for, or otherwise on behalf of one or more clearing houses; and
(3) in connection with the issue, the clearing house or houses:
(A) confer rights in relation to the debenture on other persons; and
(B) record the existence of the rights; and
(4) before the issue:
(A) the Issuer; or
(B) a dealer in relation to the placement of debentures, on behalf of the Issuer,
announces that, as a result of the issue, such rights will be able to be created; and
(5) the announcement is made in a way or ways covered by any of paragraphs (a) to (e) above (reading a reference in those paragraphs to “debenture” as if it were a reference to such a right, and a reference to “the Issuer” as if it included a reference to the dealer); and
(6) under the terms of the debenture, interests in the debenture are able to be surrendered, whether or not in particular circumstances, in exchange for other debentures issued by the Issuer that are not themselves Global Bonds.
57 The public offer test will not be treated as having been satisfied in any case where, at the time of the issue, the Issuer knew, or had reasonable grounds to suspect, that the debenture, or an interest in the debenture, would either initially or later be acquired (directly or indirectly) by an associate (as defined in Section 128F of the Tax Act) of the Issuer, other than an onshore associate or an associate who acquires the debenture in acting as a dealer, manager or underwriter for the placement of the debenture or as a clearing house, custodian, funds manager or responsible entity of a registered scheme. An onshore associate is either:
(a) a resident of Australia (as defined in the Tax Act) who did not acquire the debenture in carrying on a business at or through a permanent establishment outside Australia; or
(b) a non-resident who acquired the debenture in carrying on business at or through a permanent establishment in Australia.
In addition, the Section 128F exemption will not apply to a payment of interest or an amount in the nature of interest made to an associate (as defined in Section 128F of the Tax Act) of the Issuer if, at the time of payment, the Issuer knows, or has reasonable grounds to suspect that the recipient is such an associate. The following onshore associates who receive a payment of interest or in the nature of interest in respect of a debenture are excluded:
(a) residents of Australia who do not receive a payment in respect of a debenture acquired in carrying on a business at or through a permanent establishment outside Australia; or
(b) a non-resident that receives a payment in respect of a debenture acquired in carrying on a business at or through a permanent establishment in Australia.
In addition, associates acting in the capacity of a clearing house, paying agent, custodian, funds manager or responsible entity of a registered scheme are excluded.
Unless otherwise specified in relevant documentation, the Issuer intends to issue the Bonds and Inscribed Stock in a way that will satisfy the requirements of Section 128F of the Tax Act.
Deemed interest
If Bonds or Inscribed Stock are issued at a discount, bear deferred interest or do not pay interest at least annually and those Bonds or Inscribed Stock are sold by a non-resident not carrying on business at or through a permanent establishment in Australia to an Australian resident or a non-resident carrying on business at or through a permanent establishment in Australia, specific rules can apply to treat a portion of the purchase price as interest for withholding tax purposes. The rules will not apply where such deemed interest in relation to a Bond or Inscribed Stock would have been exempt under Section 128F.
Exemptions under recent tax treaties
The Australian government has signed or announced new or amended double tax conventions (“New Treaties”) with a number of countries (each a “Specified Country”) which contain certain exemptions from IWT.
In broad terms, once implemented the New Treaties effectively prevent IWT applying to interest derived by:
(a) the government of the relevant Specified Country and certain governmental authorities and agencies in the Specified Country; and
(b) a “financial institution” which is a resident of a “Specified Country” and which is unrelated to and dealing wholly independently with the Issuer. The term “financial institution” refers to either a
58 bank or any other form of enterprise which substantially derives its profits by carrying on a business of raising and providing finance. However, interest paid under a back-to-back loan or economically equivalent arrangement will not qualify for this exemption.
The Australian Federal Treasury maintains a listing of Australia’s double tax conventions which provides details of country, status, withholding tax rate limits and Australian domestic implementation which is available to the public at the Federal Treasury’s Department’s website at: http://www.treasury.gov.au/contentitem.asp?pageId=&ContentID=625.
Payments under the Guarantee
Payments under the Bonds and any Inscribed Stock are guaranteed by the Guarantor pursuant to Section 22A(1) of the PAFA Act. It is not clear whether any payments by the Guarantor pursuant to this Guarantee are subject to IWT.
The Australian Taxation Office has issued a Taxation Determination which states that payments made by a guarantor constitute interest for the purposes of the IWT provisions of the Tax Act on the basis that they are in “substitution” for interest but that such payments are exempt from IWT to the extent that Section 128F applies to the interest payments being guaranteed.
Accordingly, even if payments under the Guarantee are treated as interest for the purposes of the withholding tax provisions of the Tax Act, non-resident Holders should be able to rely on the Australian Taxation Office’s Taxation Determination to the extent that Section 128F applies to the Bonds or Inscribed Stock.
General
A gain on the sale of a Bond or Inscribed Stock by a Holder who is not a resident of Australia and who does not carry on business in Australia should not result in the assessment of Australian tax provided that the gain from the sale does not have a source in Australia and subject to an exception which may give rise to a withholding tax liability referred to below. The gain may have a source in Australia if the Bonds or Inscribed Stock are sold in Australia or the Bonds or Inscribed Stock are physically held in Australia.
The exception arises if there is an arrangement for the transfer of the Bonds or Inscribed Stock to a resident of Australia at a time shortly before a coupon payment date and the sole or dominant purpose is to ensure that IWT is not payable on the coupon. Any portion of the transfer consideration which could reasonably be regarded as being received in exchange for interest would be subject to withholding tax. It would be anticipated that this exception would only potentially apply where the Section 128F exemption was not available to a particular holder of Bonds or Inscribed Stock.
Even if a gain from the sale of Bonds or Inscribed Stock is sourced in Australia, if the non-resident vendor is a resident of a country with which Australia has concluded a comprehensive double taxation treaty, then, depending on the circumstances of the case and the terms of the particular treaty, relief from Australian tax may nevertheless be available under the treaty although such relief will generally not be available when Australian withholding tax is payable in the circumstance described in the preceding paragraph.
A non-resident holder of Bonds or Inscribed Stock who is within the meaning of the Tax Act not a resident of Australia but who acquires, owns or disposes of, or receives payments in respect of, the Bonds and Inscribed Stock in carrying on business at or through a permanent establishment in Australia may be subject to a range of measures which will subject them to full rates of Australian tax. In particular:
59 interest or an amount in the nature of interest (eg, discount income on redemption of the Bonds or Inscribed Stock) paid or credited in respect of the Bonds or the Inscribed Stock will be subject to Australian tax at full rates, notwithstanding any application of Section 128F;
interest or an amount in the nature of interest paid or credited in respect of the Bond or Inscribed Stock may be subject to bearer debenture tax under Section 126 of the Tax Act if either the Bonds or the Inscribed Stock are in bearer form; and
where interest or an amount in the nature of interest is paid or credited by the Issuer to such a non- resident investor and the non-resident has not quoted a TFN, ABN or notified of an applicable exemption from withholding, Australian tax will be withheld from payments of interest at the applicable rate.
Such non-resident investors should obtain advice in relation to the Australian taxation consequences of carrying on business in Australia at or through a permanent establishment in Australia.
Recent developments
Taxation of Financial Arrangements
The Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 (“TOFA” Act”) has recently been enacted. The TOFA Act contains new rules which represent a new code for the taxation of receipts and payments in relation to “financial arrangements”. The new rules contain a number of different methods for bringing to account gains and losses in relation to “financial arrangements” (including fair value, accruals, retranslation, realization, hedging and financial records).
The new rules apply from the commencement of the first tax year beginning on or after 1 July 2010 (although taxpayers may be able to make an election to apply the rules for a tax year commencing on or after 1 July 2009 if they wish to do so). Further, the proposed new rules are not to apply to “financial arrangements” which are current as at the commencement date. In relation to current “financial arrangements” at that time, taxpayers may elect to apply the proposed new rules if they wish, but certain tax adjustments would need to be made if such an election is made.
The TOFA Act does not affect the provisions relating to the imposition of IWT. In particular, the new rules do not apply in a manner which overrides the exemption available under section 128F of the Tax Act.
60 SUBSCRIPTION AND SALE
Australia and New Zealand Banking Group Limited (ABN 11 005 357 522), Citigroup Global Markets Limited, Commonwealth Bank of Australia (ABN 48 123 123 124), Deutsche Bank AG, London Branch, National Australia Bank Limited (ABN 12 004 044 937), Royal Bank of Canada Europe Limited, The Royal Bank of Scotland plc, The Toronto-Dominion Bank, UBS Limited and Westpac Banking Corporation (ABN 33 007 457 141) (the “Panel Members”) have, pursuant to the Facility Agreement, severally agreed with the Issuer, subject to the satisfaction of certain conditions, to establish the Programme. See “Description of the Programme and the Inscribed Stock” above.
The Issuer will pay each Panel Member a commission as set out in the Facility Agreement. In addition, the Issuer has agreed to reimburse the Panel Members certain expenses in connection with the establishment of the Programme and the issue of the Bonds. There are restrictions on the price at which Panel Members and Additional Underwriters (as defined in the Facility Agreement) can, prior to the issue date, sell Original Issues of Underwritten Bonds and Further Issues of Underwritten Bonds and Placed Bonds (all as defined in the Facility Agreement).
United States of America
The Bonds and Inscribed Stock have not been and will not be registered under the U.S. Securities Act of 1933 (“Securities Act”) and include Bonds in bearer form that are subject to U.S. tax law requirements. Bonds in registered form and Inscribed Stock received in exchange therefor may be sold in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Save as aforesaid and subject to certain exceptions, Bonds and Inscribed Stock known to have been received in exchange therefor may not be offered, sold or delivered within the United States or to U.S. persons. Each Panel Member has agreed that it will not offer, sell or deliver Bonds in bearer form within the United States or to U.S. persons during the distribution compliance period except as permitted by the Facility Agreement.
In addition, until 40 days after the commencement of an offering of Bonds, an offer or sale of Bonds or Inscribed Stock within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A under the Securities Act.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Panel Member and Additional Underwriter has represented and agreed, and each further Panel Member appointed under the Programme will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Bonds which are the subject of the offer contemplated by the Offering Circular as contemplated by the Final Terms in relation thereto to the public (where the Bonds have a denomination of less than €50,000 (or its equivalent in any other currency as at the date of issue of the Bonds)) in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of such Bonds to the public in that Relevant Member State:
(a) if the Final Terms in relation to the Bonds specify that an offer of those Bonds may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a “Non-exempt Offer”), following the date of publication of a prospectus in relation to such Bonds which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in
61 another Relevant Member State and notified to the competent authority in that Relevant Member State, provided that any such prospectus has subsequently been completed by the Final Terms contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or final terms, as applicable;
(b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
(c) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
(d) at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Panel Member(s) or Additional Underwriter(s) nominated by the Issuer for any such offer; or
(e) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Bonds referred to in (a) to (e) above shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Bonds to the public” in relation to any Bonds in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Bonds to be offered so as to enable an investor to decide to purchase or subscribe the Bonds, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
United Kingdom
Each Panel Member and Additional Underwriter has represented and agreed, and each further Panel Member appointed under the Programme will be required to represent and agree, that:
(a) in relation to any Bonds which have a maturity of less than one year, (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell any Bonds other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Bonds would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer;
(b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Bonds in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and
(c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Bonds in, from or otherwise involving the United Kingdom.
62 Australia
No offering circular or other disclosure document (as defined in the Corporations Act 2001 of Australia (“Corporations Act”)) in relation to the Programme or any Bonds has been or will be lodged with the Australian Securities and Investments Commission (“ASIC”). Each Panel Member and Additional Underwriter has represented and agreed, and each further Panel Member appointed under the Programme will be required to represent and agree that, unless the relevant Final Terms (or another supplement to any Offering Circular) otherwise provides, it:
(a) has not offered or invited, and will not offer or invite applications for the issue, sale or purchase of any Bonds in Australia (including an offer or invitation which is received by a person in Australia); and
(b) has not distributed or published, and will not distribute or publish, any Offering Circular or other offering material or advertisement relating to any Bonds in Australia, unless:
(i) the aggregate consideration payable by each offeree is at least A$500,000 (or its equivalent in an alternate currency, in either case, disregarding moneys lent by the offeror or its associates) or the offer or invitation otherwise does not require disclosure to investors under Part 6D.2 of the Corporations Act;
(ii) such action complies with applicable laws and directives; and
(iii) such action does not require any document to be lodged with ASIC.
General
The Bonds may not be offered or sold, directly or indirectly, and this Offering Circular may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction.
Without prejudice to the generality of the provisions of the sixth paragraph on page 1 of this document, further restrictions on offering and sale of Bonds and on the distribution of this document may be set out in a Final Terms relating to such Bonds.
63 FORM OF FINAL TERMS
[Date]
New South Wales Treasury Corporation
Issue of A$[Aggregate Nominal Amount of Tranche] Guaranteed Global Exchangeable Bonds Payment of Principal and Interest Guaranteed by The Crown in Right of New South Wales under the A$18,000,000,000 Global Exchangeable Bond Programme
PART A — CONTRACTUAL TERMS
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Offering Circular dated [ ] [and the supplemental Offering Circular dated [ ]] which [together] constitute[s] listing particulars for the purposes of Listing Rule 2.2.4 of the Listing Rules of the Financial Services Authority (the “Listing Rules”). This document constitutes the Final Terms of the Bonds described herein for the purposes of Listing Rule 4.2.3 of the Listing Rules and must be read in conjunction with such Offering Circular [as so supplemented]. Full information on the Issuer and the offer of the Bonds is only available on the basis of the combination of these Final Terms and the Offering Circular. [The Offering Circular [and the supplemental Offering Circular] [is] [are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
Full information on the Issuer and the offer of the Bonds is only available on the basis of the combination of these Final Terms and the Offering Circular dated [current date] [and the supplemental Offering Circular dated [ ] [and [ ]]]. [The Offering Circular [and the supplemental Offering Circulars] [is] [are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that the numbering should remain as set out below, even if “Not Applicable” is indicated for individual paragraphs or sub- paragraphs. Italics denote guidance for completing the Final Terms.]
[When completing any final terms, or adding any other final terms or information, consideration should be given as to whether such terms or information constitute “a significant change” and consequently trigger the need for a supplement to the Offering Circular under Section 81 of the FSMA.]
1 (i) Issuer: New South Wales Treasury Corporation (ii) Guarantor: The Crown in Right of New South Wales 2 (i) Series Number: [●] (ii) Tranche Number: [●] [(If fungible with an existing Series, details of that Series, including the date on which the Bonds become fungible).] 3 Aggregate Nominal Amount: (i) Series: [●] (ii) Tranche: [●] 4 Inscribed Stock into which the Bonds are [●] exchangeable: 5 Specific Currency or Currencies: A$
64 6 Issue price: [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [insert date] (if applicable) 7 Post-issuance information The Issuer does not intend to provide post-issuance information. 8 Specified Denominations: [●] [(If the Bonds have a maturity of less than one year from the date of their issue, the minimum denomination must be £100,000 or its equivalent in any other currency).] 9 (i) Issue Date: [●] (ii) Record Date (date on and from [●] which the security is Ex-interest): (iii) Interest Commencement Date [●] 10 Maturity Date: [specify date] 11 Exchange Period: [●] 12 Interest Basis: [●] per cent. Fixed Rate 13 Redemption/Payment Basis: Not Applicable [unless otherwise specified in the applicable Offering Circular] 14 Change of Interest Basis or Not Applicable [unless otherwise specified in the Redemption/Payment Basis: applicable Offering Circular] 15 (i) Status of the Bonds: Senior and rank pari passu with other senior, unsecured debt obligations of the Issuer (ii) Status of the Guarantee: Senior and rank pari passu with all its other unsecured obligations [(iii)][Date [Board] approval for issuance [●] [and [●]], respectively]] of Bonds [and Guarantee] obtained: (N.B. Only relevant where Board (or similar) authorisation is required for the particular tranche of Bonds or related Guarantee)] 16 Method of distribution: [Syndicated/Non-syndicated] PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 17 (i) Rate(s) of Interest: [●] per cent. per annum payable semi-annually in arrear (ii) Interest Payment Date(s): [[●] in each year up to and including the Maturity Date] [adjusted in accordance with [specify] Business Day Convention and any applicable Business Centre(s) for the definition of “Business Day”]]/[specify other] (NB: This will need to be amended in the case of long or short coupons) (iii) Fixed Coupon Amount(s): [●] per [●] in nominal amount (iv) Other terms relating to the method [Not Applicable/Give details] of calculating interest for Fixed Rate
65 Bonds: PROVISIONS RELATING TO REDEMPTION 18 Final Redemption Amount: Not Applicable [unless otherwise specified in the applicable Offering Circular] 19 Early Redemption Amount(s) payable on Not Applicable [unless otherwise specified in the redemption for taxation reasons or on applicable Offering Circular] event of default and/or the method of calculating the same: GENERAL PROVISIONS APPLICABLE TO THE BONDS 20 Form of Bonds: [Temporary Global Bond exchangeable for Definitive Bonds/Registered Bonds/Other [specify]] 21 Additional Financial Centre(s) or other [Not Applicable/give details] special provisions relating to Payment Dates: (Note that this item relates to the place of payment and not Interest Period end dates to which item 17(ii) relates) 22 Talons for future Coupons or Receipts to [Yes/No. If yes, give details] be attached to Definitive Bonds (and dates on which such Talons mature): 23 Other terms or special conditions: [Not Applicable/give details] DISTRIBUTION 24 (i) If syndicated, names of Panel [Not Applicable/give names and underwriting Members: commitments] (include names of entities agreeing to underwrite the issue on a firm commitment basis and names of the entities agreeing to place the issue without a firm commitment or on a “best efforts” basis if such entities are not the same as the Panel Members.) (ii) Date of [Accession] Agreement: [●] (iii) Stabilising Manager(s) (if any): 25 If non-syndicated, name and address of [Not Applicable/give name and address] relevant Panel Member: 26 Total commission and concession: [●] per cent. of the Aggregate Nominal Amount 27 Whether TEFRA D or TEFRA C rules [●] applicable or TEFRA rules not applicable: 28 Additional selling restrictions: [Not Applicable/give details] OPERATIONAL INFORMATION 29 Any clearing system(s) other than [Depository Trust Company/Other[specify]] Euroclear and Clearstream, Luxembourg and the relevant identification number(s): 30 Delivery: Delivery [against/free of] payment
66 31 Additional Paying Agent(s) (if any): [●]
[LISTING AND ADMISSION TO TRADING APPLICATION
These Final Terms comprise the final terms required to list and have admitted to trading the issue of Bonds described herein pursuant to the listing of the A$18,000,000,000 Global Exchangeable Bond Programme of New South Wales Treasury Corporation.]
RESPONSIBILITY
The Issuer accepts responsibility for the information contained in these Final Terms. [[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [●], no facts have been omitted which would render the reproduced inaccurate or misleading.]
Signed on behalf of the Issuer:
By:………………………………………………
Duly authorised
By:……………………………………………….
Duly authorised
67 PART B — OTHER INFORMATION
1 LISTING (i) Admission to Listing [Application will be made for the Bonds to be admitted to listing on the Official List of the UK Listing Authority/Other (specify)/Not Applicable] (ii) Admission to trading: [Application has been made for the Bonds to be admitted to trading on the London Stock Exchange’s Professional Securities Market with effect from [●]/Other (specify)/Not Applicable] (NB. Where documenting a fungible issue, indicate that original securities are already admitted to trading.) 2 [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE [ISSUE/OFFER] Need to include a description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. May be satisfied by the inclusion of the following statement: “Save as discussed in [“Subscription and Sale”], so far as the Issuer is aware, no person involved in the offer of the Bonds has an interest material to the offer.”] 3 REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES [(i) Reasons for the offer [●] (See [“Use of Proceeds”] wording in the Offering Circular if reasons for offer different from making profit and/or hedging certain risks will need to include those reasons here.)] [(ii) Estimated net proceeds: [●] (If proceeds are intended for more than one use will need to split out and present in order of priority. If proceeds insufficient to fund all proposed uses state amount and sources of other funding.) [(iii) Estimated total expenses: [●][Include breakdown of expenses.] (Only necessary to include disclosure of net proceeds and total expenses at (ii) and (iii) above where disclosure is included at (i) above.)] 4 YIELD Indication of yield: [●] Calculated as [include details of method of calculation in summary form] on the Issue Date. As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.] ISIN Code: [●] Common Code: [●]
68 Any clearing system(s) other than [Not Applicable/give name(s) and number(s)] Euroclear Bank S.A./N.V. and Clearstream Banking societe anonyme and the relevant identification number(s): Delivery: Delivery [against/free of] payment Names and addresses of additional [●] Paying Agent(s) (if any):
69 GENERAL INFORMATION
1. The listing of Bonds on the Official List and admittance to trading on the Market will be expressed as a percentage of their principal amount (exclusive of accrued interest). It is expected that each Series of Bonds which is to be listed on the Official List and admitted to trading on the Market will be admitted separately as and when issued, subject, inter alia, to the delivery to the UK Listing Authority of the relevant Final Terms and the issue of such Bonds (where appropriate in global form). The listing of the Programme in respect of such Bonds is expected to be granted on or around 31st December, 2010. Prior to official listing of a Series of Bonds, however, dealings will be permitted by the London Stock Exchange in accordance with its rules. Transactions will normally be effected for settlement in Australian dollars.
2. Each Bearer Bond and each Coupon will bear the following legend: “Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code”.
3. The Issuer is a statutory corporation constituted by the Treasury Corporation Act 1983 of New South Wales (“TCA”).
4. The issue of Bonds under the Programme by the Corporation was authorised by a decision of the Chief Executive of the Corporation pursuant to Section 4(4) of the TCA dated 7th March, 1990.
5. The Issuer, the Group and the Guarantor are not and have not been a party to any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer and the Guarantor are aware) during the 12 months prior to the date hereof which may have, or have had in the recent past, a significant effect on the financial position or profitability of the Issuer, the Group or the Guarantor.
6. As at the date of this document, there has been no significant change in the financial or trading position of the Issuer and the Group since 30th June, 2010 (the date of the latest audited annual consolidated financial statements of the Issuer) and no material adverse change in the prospects of the Issuer and the Group since 30th June, 2010 (the date of the latest published audited financial statements of the Issuer).
7. As at the date of this document, there has been no significant change in the information relating to public finance and trade which is disclosed on pages 16 to 28 (inclusive) of this Offering Circular in respect of the Guarantor since 30th June, 2010.
8. The Bearer Bonds have been accepted for clearance through Euroclear and Clearstream, Luxembourg (which are the entities in charge of keeping the records). The appropriate ISIN and Common Code number for each Series of Bonds will be set out in the relevant Final Terms. Upon the exchange of a temporary Global Bearer Bond for definitive Bonds the Bonds will be fungible for the purposes of transactions through Euroclear and Clearstream, Luxembourg with outstanding Bonds in definitive form forming a single Series with such Bonds and will have the same Common Code number as such outstanding Bonds. Prior to such exchange, the ISIN and Common Code number allocated by Euroclear and Clearstream, Luxembourg to the Bonds represented by such temporary Global Bearer Bond will be different from the number allocated to such outstanding Bonds.
The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium, the address of Clearstream, Luxembourg is 42 Avenue JF Kennedy L-1855 Luxembourg and the address of The
70 Depository Trust Company is 55 Water Street, New York, NY 10041-0099, USA. The address of any alternative clearing system will be specified in the applicable Final Terms.
9. Each Final Terms will contain the following information in respect of each issue of Bonds:
(a) the aggregate principal amount of such Bonds;
(b) the total principal amount of Bonds outstanding forming a single Series with such Bonds;
(c) details of the Inscribed Stock into which such Bonds are to be exchangeable;
(d) the Exchange Period relating to such Bonds;
(e) the Maturity Date of such Bonds, which shall be the same as the Maturity Date of such Inscribed Stock;
(f) the interest payment dates in respect of such Bonds;
(g) the fixed rate of interest payable on such Bonds;
(h) the issue date of such Bonds;
(i) the issue price of such Bonds;
(j) the Common Code number allocated by Euroclear and Clearstream, Luxembourg in respect of the period prior to the exchange of the temporary Global Bearer Bond and, if applicable, in respect of the period thereafter, being the Common Code number of existing outstanding Bonds of the same Series;
(k) if relevant, details of any necessary or appropriate adjustments to the terms and conditions of such Bonds to ensure compliance with any applicable legal and regulatory requirements;
(l) whether or not the Bonds are listed on the Official List and admitted to trading on the Market or any other stock exchange; and
(m) any additional selling restrictions.
10. For so long as the Programme remains in effect or any Bond issued thereunder remains outstanding, the following documents will be available for inspection, during usual business hours on any weekday (Saturdays and public holidays excepted) at the specified office of the Fiscal Agent in London and the principal office of the Issuer:
(a) the Treasury Corporation Act 1983 of New South Wales, the Public Authorities (Financial Arrangements) Act 1987 of New South Wales and the Public Authorities (Financial Arrangements) Regulation 2005 of New South Wales;
(b) the Annual Report, Accounts and Audit Report of the Issuer for the financial years ending on 30th June, 2009 and 30th June, 2010, any interim financial statements published in respect of any period ending after 30th June, 2010 and, when available, the most recent published Annual Report and Accounts of the Issuer in respect of any period ending after 30th June, 2010;
(c) the Annual Report, Accounts and Audit Report of the Guarantor for the financial years ended on 30th June, 2009 and 30th June, 2010 and, when available, the most recent published Annual Report, Accounts and Audit Report of the Guarantor in respect of any period ending after 30th June, 2010;
(d) the Budget of the Guarantor for the financial year ending on 30th June, 2011 and when available, the most recent published Budget of the Guarantor in respect of any period ending after 30th June, 2011;
(e) the Facility Agreement;
71 (f) the Fiscal Agency Agreement (including the forms of the Bonds);
(g) the Deed of Covenant;
(h) each Final Terms for Bonds which are listed on the Official List and admitted to trading on the Market or any other stock exchange; and
(i) a copy of this Offering Circular together with any supplement to this Offering Circular or further Offering Circular.
11. Where information in this Offering Circular has been sourced from third parties this information has been accurately reproduced and as far as the Issuer is aware and is able to ascertain from the information published by such third parties no facts have been omitted which would render the reproduced information inaccurate or misleading. The source of third party information is identified where used.
12. The Auditor-General of New South Wales has audited, and rendered unqualified audit reports on, the accounts of the Issuer for the financial years ending on 30th June, 2008, 30th June, 2009 and 30th June 2010.
72 PRINCIPAL OFFICE OF THE ISSUER
Level 22, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000
AUDITOR P. Achterstraat Auditor-General of New South Wales 234 Sussex Street, Sydney NSW 2000
LEGAL ADVISERS
To the Issuer To the Issuer To the Issuer As to Australian Law As to English Law As to United States Law Mallesons Stephen Jaques Linklaters LLP Sullivan & Cromwell LLP Level 61, One Silk Street, 125 Broad Street, Governor Phillip Tower, London EC2Y 8HQ New York NY 10004 1 Farrer Place, Sydney NSW 2000
FISCAL AND PAYING AGENT, EXCHANGE AGENT AND TRANSFER AGENT
Deutsche Bank AG, London Branch Winchester House, 1 Great Winchester Street, London EC2N 2DB
BOND REGISTRAR
Deutsche Bank Trust Company Americas c/o Deutsche Bank National Trust Company, Trust & Securities Services, 6th Floor, 100 Plaza One, Jersey City, New Jersey 07311-3901
PAYING AGENT Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer, L1115-Luxembourg
73