Unless otherwise agreed with NSW Treasury, Responsible Agencies must incorporate the following principles in the PPP project deed with respect to a refinancing.
In principle, any proposed refinancing should not result in a debt balance, at any time between the date of the refinancing and the end of the concession, greater than the projected debt balances in the original Base Case Financial Model without prior consultation with NSW Treasury2. Refinancing is considered a Category A material event requiring NSW Treasury (ISFU) consultation: (See Appendix 5 of these Guidelines).
• the transaction costs relating to future debt refinancing should be appropriately allocated in the previously agreed Base Case Financial Model; and
• any refinancing gains are to be shared between the NSW Government and the private party on a 50:50 basis. A refinancing gain will occur when the projected equity return at the time of the refinancing (taking into account the refinancing) is above that reflected in the previously agreed Base Case Financial Model.
To the extent a refinancing results in a gain (whether it be a consent or non-consent refinancing), the NSW Government's share in a PPP refinancing gain will be a lump sum return to the Consolidated Fund or a reduction to the ongoing service payments, and the Responsible Agency's financial estimates adjusted accordingly. NSW Treasury should be consulted on the methodology for receiving the refinancing gain share.
NSW Treasury will also provide guidance as to whether a variation to an existing GSF Act approval is required (refer to section 4.5).
A Responsible Agency consenting to any refinancing (including consent deeds) should not include amendments to the associated PPP project deed or any other PPP documents. Any amendments to the PPP project deed or any other PPP document must be contained in an amending (and restatement) deed.
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