Borrowing and financing strategies

Financial markets

Borrowings

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

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

Wholesale public issues

The primary source of funding for NTTC is Australian dollar denominated bonds issued in the wholesale market via syndication. In executing its borrowing program, NTTC’s strategy is to issue larger benchmark bond lines with a minimum balance of $500 million to meet investor demand for greater liquidity and to promote market awareness.

In 2022-23, NTTC successfully priced a new 12-year fixed rate benchmark bond maturing in March 2035. In the period ahead, NTTC will continue to consider increases to the outstanding bond series to achieve benchmark bond status ensuring the level of maturing debt for each line is within the target band.

NTTC currently has 15 institutional bond issues:

​Maturity date​Coupon ​Amount on issue
​21 October 2024 ​2.75% ​A$500 million
15 March 2026​ 6.00%​ A$650 million​​
21 April 2027 2.75% A$750 million
​21 April 2028 ​3.50% ​A$750 million
21 May 2029 2.00% A$750 million
21 May 2030 3.50% A$750 million
21 April 2031 2.00% A$750 million
21 May 2032 2.50% A$750 million
​21 April 2033 3.75% A$750 million
21 March 2035 4.50% A$650 million
21 March 20365.50%A$650 million
21 May 20385.25%A$500 million
21 March 2041 2.75% A$100 million
​21 November 2042 ​4.10% ​A$650 million
21 March 2051 3.00% A$150 million

Private placements

In addition to issuing benchmark bonds, private placements are used by NTTC to satisfy specific funding needs. Private placements are attractive because of the ease of issuance, which makes them suitable for small parcels of debt and their flexibility for tailoring to domestic market movements and investor demand.

Promissory notes

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

While NTTC had no promissory notes on issue as at 30 June 2023, the promissory note facility remains available to use during the year to meet short-term funding requirements.

Territory Bonds

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

As at 30 June 2023, the total outstanding balance in Territory Bonds was about $797 million, a decrease of about $200 million compared to 30 June 2023.

Graph of Territory bonds outstanding balance over a 10 years period.

Debt profile

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

As at 30 June 2023, NTTC’s total outstanding domestic debt was about A$9.7 billion. Total borrowings in 2022-23 was about A$705 million, which included $130 million of prefunding for 2023-24.

Credit rating

NTTC is rated Aa3 by Moody’s Investors Service with a stable outlook.

Government guarantee

All obligations incurred or assumed by NTTC are guaranteed by the Treasurer on behalf of the Territory under section 20 of the Northern Territory Treasury Corporation Act 1994.

Interest withholding tax on NTTC domestic bonds

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

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

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

NTTC domestic bonds that qualify under s.128F

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

Maturity dateCoupon Coupon dates Austraclear
series ID
ISIN number
​21 October 2024 ​2.75% ​21 April and 21 October ​NT2770 ​AU3SG0001597
15 March 2026​​ 6.00%​ 15 September and 15 Mar​​ch NT2741​ AU000NT27410​​
21 April 2027 2.75% 21 October and 21 April NT2776 AU3SG0001886
​21 April 2028 ​3.50% ​21 October and 21 April ​NT2772 ​AU3SG0001738
21 May 2029 ​2.00% 21 November and 21 May NT2777 AU3SG0001951
21 May 2030 3.50% 21 November and 21 May NT2775 AU3SG0001845
21 April 2031 2.00% 21 April and 21 October NT2778 AU3SG0002074
21 May 2032 2.50% 21 May and 21 November NT2779 AU3SG0002470
21 April 2033 3.75% 21 October and 21 April NT2774 AU3SG0001795
21 March 2035 4.50% 21 September and 21 March NTTC01 AU35G0002785
21 March 20365.50%21 September and 21 MarchNT2782AU3SG0002918
21 May 20385.25%21 May and 21 NovemberNT2783AU3SG0002967
21 March 2041 2.75% 21 March and 21 September NT2781 AU3SG0002587
​21 November 2042 ​4.10% ​21 May and 21 November ​NT2773 ​AU3SG0001746
21 March 2051 3.00% 21 September and 21 March NT2780 AU3SG0002538

Other NTTC domestic bonds

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


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