Funding and Summary Financial Information

Infratil’s use of debt

Within the Infratil Group, debt can be categorised as:

• The borrowings of operating companies not 100% owned by Infratil. A creditor of one these companies has no claim against, or recourse to the assets of, Infratil or any member of the Infratil Group other than the relevant debtor company.
• Borrowings of 100% Infratil owned subsidiaries. Creditors in most cases have a claim against all 100% Infratil owned subsidiaries as guarantors which would rank ahead of the claim of a liquidator of Infratil. They also in most cases have a claim against Infratil as guarantor, which ranks equally with the Bondholders’ claims against Infratil.
• Infrastructure Bonds issued by Infratil, the parent company. Bondholders have no claims against, or recourse to the assets of, Infratil’s subsidiaries or associates in respect of Infratil’s obligations under the Infrastructure Bonds. The Infrastructure Bonds are either dated, which means having an explicit repayment date, or perpetual, which means there is no repayment date.

Whether debt is used for short or long term funding, it creates interest obligations and it must be repaid or rolled-over on maturity. Meeting such obligations intrinsically gives rise to risk.  Infratil minimises the former by ensuring that its interest costs are comfortably covered by reliable sources of income with a margin for unexpected events. Loan repayment risk is minimised by ensuring that the debt which falls due in any year can be repaid from several sources; cash on hand, new debt, income, asset sales, or equity issues.

To minimise debt maturities in any one year, Infratil and its subsidiaries favour using corporate bonds. Bank debt tends to be for three to five year terms, bond for five to ten years. This preference for long term funding has made the Infratil group one of New Zealand’s main issuers of corporate bonds with each of Infratil, TrustPower, Wellington Airport and Z Energy having undertaken issues.

Infratil’s 100% subsidiaries tend to have low or no borrowings from external parties except for working capital facilities, or in the case of Infratil Energy Australia vendor finance attached to the Port Stanvac power station.

Wellington Airport (66% owned by Infratil) , TrustPower (51%), Perth Energy (82%) and Z Energy (50%) are not wholly owned by Infratil and their debt is not included in this profile as they undertake their own funding activities and Infratil has no obligations in respect of this debt and is not liable for any of their liabilities.

Infratil's Debt Profile

 

31 March ($Millions)	2012	2011	2010	2009
Net Bank Debt /Cash	$363	$270	$82	$463
Fixed Maturity Bonds	$623	$623	$509	$509
Perpetual Bonds	$236	$238	$239	$240
Market Value Infratil Equity	$1109	$1,151	$1,002	$764
Total	$2,331	$2,282	$1,832	$1,976

Infratil's facilities are provided by ANZ National Bank, Bank of New Zealand, Commonwealth Bank of Australia, Kiwibank,The Hongkong and Shanghai Banking Corporation, Industrial and Commercial Bank of China and Westpac. The maturity profile of Infratil’s bank facilities and bonds as at 31 March 2012 is shown in the following table. As noted above as at 31 March 2012 Infratil's 100% group had net bank/vendor debt of $363m and total facilities of $787m.

31 March	2013	2014	2015	2016	>4 years	>10 years
Bank/Other	$195m	$339m	$119m	$78m	$55m
Bond	$57m	$85m		$153m	$328m	$236m

Infratil's Equity

Infratil has 587 million shares on issue at 31 March 2012 with an aggregrate market value of $1,109 million. Infratil is a NZX10 stock on the NZX (New Zealand Stock Exchange).