Corporate Finance’s focus is on ensuring value for money, maximising the financial results achievable within acceptable risk parameters.
Corporate Finance
NSW Treasury and other public sector agencies use TCorp’s Corporate Finance unit for a range of advisory services relating to asset procurement financing, structured finance transactions and infrastructure projects. Corporate Finance’s focus is on ensuring value for money, maximising the financial results achievable within acceptable risk parameters.
TCorp also works with private sector participants and intermediaries. Corporate Finance staff have considerable financial and commercial experience of public and private sector transactions, and well developed quantitative and financial modelling skills. Their experience covers a wide range of asset types encompassing office, medical and transport equipment and social and economic infrastructure. In carrying out its activities, the Corporate Finance unit is able to draw on the financial markets expertise of TCorp’s Treasury and economic resources.
TCorp’s analytical, commercial and financial advice can apply to existing or potential transactions. Work includes:
- preparing or reviewing and commenting on financial or commercial reports and submissions;
- assessing potential financing structures for asset acquisitions or new projects;
- financial modelling and analytical support;
- assessing private sector tender bids, including PPP projects;
- being involved in the financial close of transactions including independent attestation of market rates.
During the year, TCorp continued its active involvement in PPP projects in NSW. Projects TCorp was involved in as part of the assessment team were:
- Orange Hospital and associated health services that reached financial close in December 2007; and
- the Royal North Shore Hospital redevelopment.
TCorp works with NSW Treasury in developing and reviewing PPP policy and is involved in monitoring and managing interest rate exposures arising from PPP transactions.
Other significant activity during the year included:
- NSW Health: Liverpool Hospital car park project – providing financial modelling and financial assessment assistance;
- NSW Health and NSW Treasury: medical equipment – reviewing existing leasing and potential funding requirements;
- Department of Commerce: supply contracts – assessing financial capability of tenderers;
- Department of Housing: existing financing arrangements for social housing – assisting with continuing management; and
- NSW Treasury: budget sector agencies motor vehicle fleet – funding the arrangements and managing oversight in conjunction with StateFleet.
Advisory Services
One of TCorp’s longstanding and developing strengths is its capacity to provide financial risk management advice to clients to effectively manage risk, along with meeting NSW public sector policy requirements. In many cases, this activity is carried out as part of TCorp’s role as discretionary debt or asset manager for the general government sector and PTEs. In this capacity, TCorp advises on matters such as treasury management policies, benchmarks and portfolio risk constraints. Among considerable activity of this type during the year, two major examples are the advice to:
- debt management client Sydney Ports Corporation regarding the financing of its major development at Port Botany;
- asset management client Lifetime Care and Support Authority in respect of establishing its investment portfolio.
TCorp’s economics team makes regular presentations to debt and asset management clients, as well as emailing a weekly economic and markets brief and the preparation of monthly portfolio management reports.
TCorp also provides portfolio management advice to a small number of clients. For these clients, the service may entail regular advice, such as recommendations on refinancing of maturing loans, or single projects such as a review of policies.
A major one-off project during the year was the provision of advice to the Government’s Review of NSW Local Government Investments.
Guarantees
A number of agencies and PTEs require performance guarantees in the course of their operations. TCorp can provide this back-up, supported by New South Wales Treasury. The largest example of this activity is the substantial guarantees provided to the National Electricity Market Management Company on behalf of the State-owned electricity retailers.
Another major example is guarantees provided by TCorp to the WorkCover Authority on behalf of SOCs that self-insure their obligations under the Workers Compensation Act 1987. In addition, TCorp provides a small number of agencies with performance guarantees for other purposes.
Although a relatively minor part of its business, these guarantee activities are an illustration of the breadth of TCorp’s role in providing financial services to its clients.