2020-12-08 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                 8 DECEMBER 2020


Review Process

A review of Council’s current debt structure was commissioned and undertaken by QTC to
determine any advantages in refinancing some or all current debt based on existing interest rates
and remaining loan terms for each debt pool, and current 20 year QTC interest rates. Council’s
existing debt balances as at 1 October 2020 are outlined in table 1 below:

Table 1: Current Debt Balances
 Debt Pool                                             Market          Book              Book     6 Monthly
                                                        Value          Value          Interest   Repayment
                                                         ($m)           ($m)            Rate*         ($m)
 Noosa Planning Scheme 16/17                            $0.65          $0.59            2.82%          $0.04
 Rufous St Development                                  $1.91          $1.66            3.31%          $0.07
 North Shore Campground 17/18                           $0.27          $0.23            3.47%          $0.01
 Noosa Planning Scheme 17/18                            $0.75          $0.67            3.12%          $0.05
 Capital Program 13/14                                  $1.32          $1.19            4.19%          $0.12
 Capital Program 14/15                                  $0.52          $0.47            3.73%          $0.04
 Capital Program 15/16                                  $1.27          $1.13            3.04%          $0.05
 De-amalgamation Transfer                              $16.32         $13.91            6.29%          $1.51
 Total                                                 $23.09         $19.93          5.42%**          $1.88
*QTC admin fee of 0.115% excluded
**Weighted average rate across all loans


The review also considered the options of either funding any ERA’s associated with each debt pool
through cash or debt (i.e. recapitalising in a new loan). The options were considered to determine
the net impact on Council’s liquidity indicators under each scenario.

Review Outcomes

Attachment 1 outlines the detailed refinanced loan position under each scenario and debt pool,
which assumes that the existing loan balance is refinanced for a new 20 year loan term. A
refinanced 20 year loan term was preferred to maximise the short term cash flow benefits.

The refinanced loan position summary is provided below:

Table 2: Estimated Refinanced Loan Position as at 1 October 2020
                                 Total       Total       ERA      Refinanced          Book       Total Semi-      Total
                                Market       Book        ($m)        Loan            Interest      Annual       Reduced
                                Value        Value                 Balance            Rate*      Repayment       Annual
                                 ($m)        ($m)                    ($m)                           ($m)       Repayment
                                                                                                                  ($m)


 Current Loan Position               $23       $19.9      $3.2              n.a.      5.42%**           $1.9         n.a.
 Refinanced Loan Position – Extend Term to 20 Years
 ERA – funded by Debt                                                       $23      1.71%***           $0.7         $2.4
 ERA – funded by                                                          $19.9        1.71%            $0.6         $2.6
 Cash
*QTC admin fee of 0.115% excluded
**Weighted average rate across all loans
***Rate quoted by QTC as at 15 October 2020 and subject to daily market movements.




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