Ratings On Queensland Treasury Corp. Affirmed At #AA+/A-1+#; Outlook Remains Stable

Stocks and Financial Services Press Releases Thursday October 19, 2017 16:56
MELBOURNE--19 Oct--S&P Global Ratings
MELBOURNE (S&P Global Ratings) Oct. 19, 2017--S&P Global Ratings today said it has affirmed its 'AA+/A-1+' ratings on Queensland Treasury Corp. (QTC). The outlook remains stable.
The ratings on QTC reflect our assessment of an almost certain likelihood that extraordinary support would be forthcoming from QTC's owner and guarantor, the state of Queensland, in a distress scenario.
In accordance with our criteria for government-related entities (GREs), our view of an almost certain likelihood of extraordinary support is based on our assessment of QTC's:
  • Critical operational role in managing the state's and its authorities' debt, a significant proportion of the state's financial assets, and in providing corporate finance advice. In our view, a default by QTC would have a critical impact for the Queensland government because QTC's debt is guaranteed by the government, is the sole provider of debt financing to the state and its authorities, and it holds the state's multibillion defined benefit superannuation assets that can be used for liquidity.
  • Integral link with the Queensland government, which owns QTC and provides guarantees to it. QTC and its owner are so intrinsically linked that we assess the operations of QTC and its management of borrowings, liquidity, and financial risks when considering the credit rating on Queensland.

QTC is the central agency for the borrowing and liability management of government departments, statutory bodies, local governments, and government-owned corporations in Queensland. QTC also provides services and advice on corporate finance and financial risk management.

We consider QTC's financial management as a strong ratings factor and consistent with the 'AA+' rating on the State of Queensland. The rating on the state is inclusive of the debt of state entities and considers QTC's financial management policies and practices. QTC's operations are an important component of the credit ratings on the state because they have a significant role in carrying out the debt and liquidity management for the Queensland government.

Queensland guarantees all QTC's debt securities and derivatives pursuant with Section 32 and 33 of the QTC Act 1988. The guarantee is inclusive of all local and foreign currency public bond issues, commercial paper programs, medium-term note programs, and private loan arrangements undertaken by QTC.

We do not assign a stand-alone credit profile to QTC because of the almost certain likelihood of timely extraordinary government support, and we don't think QTC would be subject to any transition risk as it is a nonseverable arm of the government.

The stable outlook reflects that on the ratings on the state, as well as our expectation that QTC's role will remain critical and its link integral to the state over the next two years. We would raise or lower the rating on QTC if a similar action occurs on the state or we could lower the rating if we consider the likelihood of state support will weaken. We see this scenario as unlikely over the next two years.

Latest Press Release


NEXT BLOCK ASIA + Fabulous Bangkok After-Party Bangkok, Thailand will host the 2-day NEXT BLOCK ASIA "Beyond Crypto" by Krypton Events and CoinAdvice on 25-26 June 2019 at the W Hotel. The conference will bring together experts from CRYPTO and BEYOND,...

Photo Release: EXIM Thailand Visits Deputy Governor of State Bank of Vietnam To Discuss Thai Investment Prospects in Vietnam

Mrs. Warangkana Wongkhaluang (second left), Senior Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), recently paid a visit to Mr. Doan Thai Son (center), Deputy Governor of State Bank of Vietnam in Hanoi to discuss monetary...

Photo Release: EXIM Thailand Visits Thai Ambassador to Hanoi Discussing Ways to Promote Thai-Vietnamese Trade and Investment

Mrs. Warangkana Wongkhaluang (second left), Senior Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), recently paid a courtesy visit to His Excellency Mr. Tanee Sangrat (center), Ambassador of Thailand to Vietnam and Miss...

TMB re-affirms its leadership position in the Thai banking industry by launching the first ever Multi Currency Account in Thailand allowing exporters to manage six major currencies in one account

TMB continues to develop digital solutions that truly meet customer's need, creating positive changes to customer's life, along with its Make THE Difference philosophy, to re-affirm its market leadership position. TMB today becomes the first bank in...

Fitch Rates EXIM#s USD300 Million Senior Notes Final #BBB+#

Fitch Ratings has assigned Export-Import Bank of Thailand's (EXIM, BBB+/Stable) USD300 million five-year senior unsecured notes a final rating of 'BBB+'. The notes were issued under the bank's USD1.5 billion medium-term note (MTN) programme. The...

Related Topics