Investor Presentaiton
Hedging strategy
Notional swap profile
20%
D/RAB
60% D/RAB
10 year trailing average
RCP 2019-24
RCP 2025-30
Debt/RAB
Swap Execution
Tenor Year
FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29
10%
5
2019
10%
5
2019
6.0%
1
2016
6.0%
2
2016
6.0%
3
2016
6.0%
4
2016
6.0%
5
2016
6.0%
6
2016
6.0%
7
2016
6.0%
8
2016-17
6.0%
6.0%
9
2017
10
2018
60% Debt/RAB hedged to 10 year trailing average profile with
20% Debt/RAB hedged to next regulatory reset in June 2024
Overview
The interest hedging strategy can be broken down into:
•
•
60% debt to RAB hedged to 10 year trailing average
cost of debt¹
Ausgrid has amortising swap profile that
matches the tenor and profile of the existing
regulatory debt allowance
Further swaps will be executed to match the
timing and volume of the annual 10% cost of
debt resets by the AER
20% debt to RAB (equity portion) hedged to end of
current RCP
1.
The AER currently sets the allowed return on debt by implicitly assuming that at the start of FY15 Ausgrid issued 100% of its debt at the rate of 6.51% (the yield on 10 year BBB+ rated
bonds 28 February - 30 June 2014) and then 10% of the notional debt that matures each year and is replaced with debt issued at a rate equal to prevailing rates over the observation
period during previous calendar year
40
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