(NB: When I refer to UTAS in my writings, I am generally referring only to the senior decision makers in the University rather than the University, or the staff of the University, in general. My meaning can normally be judged from the context).

I have held over my blog post Business Basket Case – The UTAS Council’s decision to move to the CBD – Part 2 because of the importance I attach to this post.

For my previous posts on UTAS’ Green Bond see:

Key Points

Section 7(2) of the University of Tasmania Act 1992 (UTAS Act) states:

“…the University is not to exercise its power to borrow money unless it has first obtained the written approval of the Treasurer.”

During February 2022, UTAS launched its Green Bond debt issuance programme, which resulted in UTAS borrowing $350 million from the market.

  • Around the same time, UTAS established a corporate debt facility for working capital purposes with an Australian bank, possibly for $50 million.

  • UTAS had previously had a $200 million borrowing facility with Tascorp (a $125 million loan facility and $75 million overdraft facility), approved and also explicitly guaranteed by the State Government in the midst of COVID-19, which was refinanced through the Green Bond.

Documents provided to me under the Right to Information Act 2009 (RTI Act), on 15 March 2023 by the Tasmanian Department of Treasury and Finance, indicate that UTAS borrowed through the Green Bond without a valid borrowing approval from the then Premier and Treasurer Peter Gutwein, a clear breach of the UTAS Act, making the borrowing vulnerable in court if ever challenged.

The fact that UTAS Council Minutes indicate that no-one on the Council gave thought to their legal obligations to ensure a valid approval from the Treasurer was in place when authorising the Green Bond programme (together with the new corporate debt facility) is a damning indictment of that body.

  • If there is one thing that UTAS Council members should be concerned about above all else it is their compliance with the law.

  • In particular, Council members could reasonably have been expected to know UTAS’ legal obligations under the UTAS Act and to have sought assurance from Management that those legal obligations had been met.

  • I suggest UTAS Council members who failed to ensure that UTAS was meeting its most fundamental legal obligations with respect to the Green Bond should carefully consider their position on the Council. This applies doubly to any UTAS Council member who was sitting on the responsible UTAS committee advising Council at the time – probably the Finance Committee.

UTAS Management, including Vice-Chancellor (VC) Black who took a lead role in this matter, also appear as either grossly incompetent and/or all too ready to put themselves above the law.

The State Government also appears as completely derelict in its responsibilities.

If it was aware that UTAS was about to break the law in issuing the Green Bond, the Government should have taken action to remind UTAS of its legal obligations prior to the Bond issue and advise it to seek the requisite approval under the UTAS Act.

If it was taken unaware (and you would have to ask how this could be so), surely it rebuked UTAS for seemingly borrowing without approval and took some form of remedial action.

Perplexingly, however, the Treasury RTI documents are completely silent on these matters.

Why, when the State Government has apparently seen UTAS act so incompetently/arrogantly in breach of UTAS’ own Act does it continue to accept every word UTAS’ says about its proposed CBD move?

  • In my next blog post, I will run the ruler over the UTAS’ economic case for the proposed Hobart CBD move. For now, I will simply say that there appears to be considerable financial risk associated with the proposed move.

UTAS borrowed the $350 million through the Green Bond and established a corporate debt facility after seeking to increase its borrowing facility with Tascorp from $200 million to $400 million.

In acting “to mitigate risks to the State where possible“, in Premier Gutwein’s words, Tascorp sought to impose conditions on UTAS that apparently UTAS found too onerous to accept, with the result that it proceeded to the market instead.

  • As Treasurer, Mr Gutwein issued a conditional approval by letter of 3 March 2021 to VC Black for UTAS to increase its borrowings from $200 million to $400 million. As I set out under ISSUES below, I believe that any reliance on this document by UTAS or the State as a basis for the Green Bond borrowing would be wrong.

  • Despite a request from UTAS, Mr Gutwein was not prepared to increase the State’s guarantee of UTAS’ debt beyond $200 million.

UTAS has exchanged a situation in which it might have had a $400 million borrowing facility with Tascorp, with $200 million of that amount explicitly guaranteed by the State Government to a situation in which it has borrowed $350 million from the market through the Green Bond, which Moody’s claims is supported by an implicit Commonwealth Government guarantee, as well as having a short term debt facility.

  • I do not believe for a moment that the Commonwealth would accept responsibility for debt approved by the Tasmanian Government, let alone debt that under law should have been subject to formal State approval processes, but was not. If UTAS were to run into financial difficulties pursuing a move to the CBD, I believe it is Tasmania that would bear the cost.

  • The public is also reasonably entitled to know whether UTAS has made savings or losses from moving directly to the market for its borrowings.

The Tasmanian Auditor-General should immediately launch an investigation into this matter.

An amendment to the UTAS Act should be passed as soon as possible, requiring that all future borrowing approvals issued to UTAS under section 7(2) of the UTAS Act be tabled in the Parliament.

All Government guarantees to UTAS should also be required to be tabled in Parliament.

Central Players – VC Rufus Black and Premier and Treasurer, Peter Gutwein

Background

Right to Information Application

On 22 November 2022, I submitted a Right to Information application to the Tasmanian Department of Treasury and Finance (Treasury) seeking various records relating to UTAS, including: records relating to Moody’s Investor Service which provided a credit rating to UTAS and rated UTAS’ debt issuance programme for the Green Bond; records of Tasmanian Government guarantees to UTAS; and any records of Tasmanian Government involvement with UTAS’ issue of the Green Bond.

On 15 March 2023, I finally received a decision letter from Treasury (dated 10 March) and a number of relevant documents.

The decision letter identified a number of exemptions from disclosure – taking the form both of redactions in documents provided and the exemption of complete documents.

I have concerns with a number of the exemptions and have also detected significant gaps and issues in the documentation provided (and will be seeking a review).

Timeline of major events

Despite the deficiencies in the documents provided by Treasury, they do enable the construction of a reasonably detailed Timeline, when taken together with other publicly available material.

As the history of UTAS’ borrowing of $350 million is complex, with a number of different facets, the Timeline is necessarily long. Readers may wish to skip directly to the ISSUES section that follows the Timeline but can do so in the knowledge that supporting documentation is fully identified in the Timeline.

  • Prior to issue of the Green Bond, UTAS borrowed from Tascorp. As UTAS’ borrowing arrangements with Tascorp are referred to frequently throughout the Timeline, a table prepared by John Lawrence is provided at Appendix 1 at the end of this post detailing those arrangements in the period 2018-21 (calendar years).

  • Besides the documents provided by Treasury, the other major source for this Timeline is the set of UTAS Council Minutes for the period 1 January 2019 to 4 April 2022, provided to me under the RTI Act by UTAS under scrutiny by the Ombudsman’s office.

  • I have included the most relevant sections of the Minutes in Appendix 2 at the bottom of this document. The full 264-page document is available at this link. I have written separately on UTAS’ release of the Council Minutes.

  • References to Peter Gutwein in this Timeline focus on his role as Treasurer, but he was also Premier at the time, and there seems to be some blurring of his roles in the documentation – an issue in itself.

June 2019 – Treasurer Gutwein provided a short-term borrowing approval to UTAS under section 7(2) of the UTAS Act (document not provided or exempted but referenced in Record 5 of 4 October 2019)

  • The approval appears to have been issued to enable UTAS to increase its borrowing from Tascorp.

  • UTAS’ financial year begins on 1 January and ends on 31 December. At the end of 2019 UTAS had a $125 million loan facility and a $75 million overdraft facility with Tascorp (see Appendix 1 for full details).

12 September 2019 – UTAS wrote to Treasurer Gutwein providing an update on discussions with Tascorp regarding its borrowing requirements and seeking approval for a medium-term borrowing request (UTAS letter not provided but referenced in Record 5).

4 October 2019 – Treasury (Secretary Tony Ferrall) provided a brief to Treasurer Gutwein entitled University of Tasmania – medium term borrowing (Record 5). This provided a suggested response to UTAS’ letter seeking information from UTAS to enable its medium-term borrowing request to be considered. The brief outlined a high level framework for considering UTAS’ future borrowing requirements, but this has been redacted.

15 June 2020 – In light of COVID-19, Treasurer Gutwein provided Tascorp with a Letter of Guarantee for authorities borrowing through Tascorp. The maximum borrowing limit set for UTAS was $200 million (document not provided but referenced in Record 6 of 3 August 2020).

3 August 2020 – Mr Ferrall, in his capacity as Secretary of Treasury, wrote to VC Black in a letter entitled COVID-19 Borrowing Arrangements (Record 6). Apart from referencing the provision of the guarantee to UTAS and the borrowing limit of $200 million, Mr Ferrall advised that for transparency and consistency there would need to be disclosure of the Government’s explicit support (the guarantee) in UTAS financial statements.

  • The apparent lack of transparency around the Government’s guarantee to UTAS should be of concern, especially given Mr Ferrall’s request.

6 October 2020 – VC Black wrote to Mr Gutwein seeking approval for a $200m increase in UTAS’ borrowing facility limit (letter not provided but referenced in Record 1 of 23 October 2020).

28 October 2020 – Mr Gutwein, on Premier letterhead, wrote to VC Black, in a letter entitled University of Tasmania borrowing limit increase (Record 1), requesting a number of documents – including “a business case in support of the borrowing limit” – to enable consideration of UTAS’ requests “for an increased funding facility”. The letter also reiterated a previous request (not provided) that UTAS obtain a standalone credit rating.

4 December 2020 UTAS Council Meeting – Management spoke to the need to increase debt by [figure redacted, but presumably $200 million] for the southern campus strategy (Appendix 2).

2 February 2021 – in light of the documents requested by Mr Gutwein on 23 October 2020 being received from UTAS (copies not provided), Treasury (Mr Ferrall) provided a brief to Treasurer Gutwein entitled University of Tasmania Southern Infrastructure Project Borrowing Increase (Record 8). While heavily redacted, the brief indicates that UTAS:

“also raised the potential for an increase to the Government’s guarantee under the COVID-19 borrowing arrangements.”

The brief recommended:

“you consider the University’s request to borrow an additional $200 million and make a determination in accordance with section 7(2) of the [UTAS Act]”

The rest of the recommendation is redacted but presumably included declining UTAS’ request for an increase in the Government guarantee (see next entry).

3 March 2021 – pursuant to Treasury’s brief of 2 February 2021, Treasurer Gutwein wrote to VC Black in a letter entitled Southern Infrastructure Project Borrowing Limit Increase (Record 10), among other things stating:

  • A letter was also sent to the Chair of Tascorp (Mr Ferrall) in part advising him of this development (Record 14).

18 March 2021 – VC Black responded to Premier (sic) Gutwein in an untitled letter (Record 3), among other things noting the approval of the increase in borrowing limit, the credit rating condition, and flagging the need to work with Tascorp. He concluded by stating:

“I look forward to briefing you on the plans for our Southern Infrastructure when we meet on 31 March in Launceston.”

31 March 2021 – Tascorp considered/approved a $200 million increase in UTAS’ borrowing limit, subject to conditions precedent (document not provided, but some details are included in VC Black’s letter above, Record 2 of 8 June 2021 and Record 7 of 9 June 2021).

While Record 7 has redactions, it appears Tascorp’s conditions precedent included a requirement for a baseline credit assessment of investment grade, an additional/revised Master Loan Facility Agreement, a General Security Deed, covenant and security charges and an interest rate mitigation strategy.

  • In record 17 of 24 January 2022, Mr Ferrall wrote that Tascorp had approved the new $200 million facility (presumably subject to conditions precedent), providing a different approval date, for reasons that are unclear.

  • Note: Tascorp approvals are separate to Treasurer approvals.

30 April 2021 UTAS Council Meeting – Discussion records that Moody’s had been selected as the preferred credit rating agency, with a likely credit rating of A1 or A2. Notably:

“Council endorsed the potential sourcing of the additional [redacted] term debt facility and refinancing existing debt facility from a lending source other than Tascorp (Note: Council has already approved Tascorp as a lender for the aforementioned facilities)“

The VC was also delegated to execute loan agreements. (Appendix 2)

  • The canvassing of borrowing from the market rather than Tascorp, occurred before VC Black raised the possibility with the Treasurer Gutwein on 8 June 2021 (see below).

12 May 2021 – Treasury briefing to Mr Ferrall, in his capacity as Secretary of Treasury, entitled Treasury meeting with Moody’s (Record 13). This is heavily redacted.

8 June 2021 – VC Black wrote to Premier (sic) Gutwein in an untitled letter (Record 2), noting that, following “conditional approval of $200 million increase in our borrowing limit”, UTAS had continued working with Tascorp “to address [Tascorp’s] conditions precedent”. However, VC Black noted a “significant issue” with regard to Tascorp’s requirement for a General Security Deed over all UTAS’ assets,

“which will breach already existing contractual arrangements and will require comprehensive due diligence over all University contractual arrangements, and ongoing monitoring.“

VC Black went on to say:

  • My understanding is that Tascorp’s requirements were standard. It seems that UTAS bridled at having these conditions imposed upon it. VC Black may have hoped to secure a watering down of Tascorp’s security requirements in a private discussion with Premier Gutwein. There would have been no scope for this, given Tascorp’s independence in its function.

  • In a letter to Tascorp of 22 July 2021, Mr Gutwein acknowledged that in seeking additional security Tascorp was acting “to mitigate risks to the State where possible”.

  • From the documents provided by Treasury, this appears to be the first time UTAS mentioned to the Government the alternative of borrowing from the market, including repayment of its existing Tascorp debt, although it had been canvassed in UTAS Council meetings.

  • Tellingly VC Black refers to doing this “within the approved $400 million borrowing facility limit with the State“, totally ignoring the conditions on that approval. This statement should not have been allowed to pass unquestioned.

9 June 2021 – a brief from Treasury to Mr Gutwein as Premier and Treasurer, called University of Tasmania Infrastructure Borrowings (Record 7). This brief contained detailed chronological background on UTAS’ borrowings. The brief is heavily redacted. The unredacted material has already been used in relevant entries above.

25 June 2021 UTAS Council Meeting – Among other things, Council approved the option of sourcing additional funding and

“refinancing of existing debt facilities conditional upon commercially viable convenants and security requirements….and approved delegation of authority to the Vice-Chancellor to transact with Tascorp or an alternate lender…” (Appendix 2)

1 July 2021 – Mr Ferrall, in his capacity as Chair of Tascorp, wrote to Mr Gutwein, in his capacity as Treasurer, in a letter entitled University of Tasmania Borrowing Request (Record 16). The first paragraph outlines Tascorp’s then current arrangements with UTAS. While the remainder of the letter is redacted, Record 4 of 22 July 2021 indicates that Mr Ferrall sought assurance from the Treasurer that the existing Letter of Guarantee (for $200 million) would continue to apply if Tascorp agreed:

“to the University’s Southern Infrastructure Project borrowing request of an additional $200 million and the extensions of the maturity of the existing $125 million borrowing from 2023 to 2046.”

  • Note that nothing was said about UTAS’ overdraft facility of $75 million.

22 July 2021 – Treasurer Gutwein wrote to Mr Ferrall in a letter entitled, University of Tasmania Guarantee (Record 4), providing that assurance and continuing:

  • Again, it should be stressed here that Mr Gutwein acknowledged that in seeking additional security Tascorp was acting “to mitigate risks to the State where possible”.

30 July 2021 UTAS Council Meeting – brief update provided to Council (Appendix 2).

27 October 2021 – Treasury briefing to Treasurer Gutwein entitled University of Tasmania Southern Infrastructure Borrowings (Record 9). This brief is redacted in key sections and it is not clear what its purpose was. However, it does list the conditions the Treasurer placed on his borrowing approval to UTAS on 3 March 2021. It also clearly contemplates UTAS borrowing from the market:

“The COVID-19 Government guarantee was issued to Tascorp, and will not apply to any borrowings the University takes out with the market, including any potential refinancing of its existing borrowings.“

28 October 2021 UTAS Council Meeting – this record is heavily redacted but among other things, Council noted:

“following constructive discussions with Tascorp and the Tasmanian Government, it is likely the commercial market will best fit the University’s funding needs and Management will now proceed to a detailed assessment of options.” (Appendix 2)

3 December 2021 UTAS Council Meeting – the full record for consideration of the funding issue was:

“5.1 Funding Update

This item was unstarred and therefore not discussed.

Resolution 03-12-2021_UC_12770-10433
Council noted that the University had discontinued negotiations with Tascorp to investigate alternative funding options with commercial lenders and had completed a request for proposal with three major Australian lenders (CBA, NAB and ANZ) in the week ending 19 November 2021.

Resolution 03-12-2021_UC_12770-10434
Council noted best and final offers were being negotiated and the status of the recommended outcome as provided at the Council meeting” (Appendix 2).

  • In view of the importance of this issue, and the stage it had reached, the lack of discussion is surprising.

10 December 2021 – Moody’s assigned a “first-time Aa2 rating to University of Tasmania“

24 January 2022 – Mr Ferrall in his capacity as Chair of Tascorp wrote to Premier Gutwein in his capacity as Treasurer, in a letter entitled University of Tasmania – TASCORP Consent Provided for UTAS to Borrow from the Market (Record 17), to provide an update on arrangements relating to UTAS’ request for funding to commence the Southern Infrastructure Project. The letter refers to Tascorp approving a new $200 million facility to facilitate the Southern Infrastructure Project on 28 July 2021 (seeming to contradict the date in Record 7), however from the title of the letter, it is clear Tascorp had given approval for UTAS to borrow direct from the market.

THIS IS CHRONOLOGICALLY THE LAST DOCUMENT PROVIDED BY TREASURY

23 February 2022 UTAS Council Meeting

“Council discussed the University’s pursuit of alternative commercial financing arrangements in accordance with the outcome of the tender process conducted in December 2021, including a corporate debt facility for working capital purposes of [redacted, but likely to be $50m] with [redacted, but likely one of CBA, NAB or ANZ] and bond issuance for [redacted, but likely to be $350m] facilitated by Joint Lead Managers [redacted] and [redacted- other documentation shows the Managers were CBA and NAB].”

From the minutes it is clear the UTAS Council continued to discuss the matter in some depth, including arrangements for delegation of ultimate decision making debt arrangements to VC Black. However, there is no indication of consideration being given to the need for a new loan approval under section 7(2) of the UTAS Act. (Appendix 2)

23 February 2022 – UTAS media release announcing the launch of the Green Bond, with comments by Chief Operating Officer, David Clerk.

24 February 2022 – Moody’s assigned a “first-time provisional rating to University of Tasmania’s AUD debt issuance programme”

2 March 2022 – Investor Presentations (source: UTAS Council Minutes of 23 February 2022)

8 March 2022 – Launch of Programme with the Commonwealth Bank and National Australia Bank as joint lead managers (source: UTAS Council Minutes of 23 February 2022)

18 March – Article in The Australian, covering the Green Bond issue, with comments by Chief Operating Officer David Clerk

4 April 2022 UTAS Council Meeting – Council considered the Green Bond very briefly, with no mention of the lack of Government approval for borrowing (Appendix 2).

UTAS COUNCIL MINUTES END

ISSUES

The Missing Government Approval for the Green Bond

Once UTAS had made an (in-principle) decision to approach the market for debt funding, including refinancing of its debt from Tascorp, it should have written to the Treasurer advising him of its plans, provided any requisite details, and sought an unconditional approval under section 7(2) of the UTAS Act.

Subject to consideration, an appropriately worded approval could then have been issued by the Treasurer.

No such request by UTAS or approval by the Treasurer has been provided by Treasury. Indeed the final brief provided by Treasury was that dated 27 October 2021 and the final document provided by Treasury is the letter from Mr Ferrall to the Treasurer of 24 January 2022, before the UTAS Council made its final decision to access the market and refinance its Tascorp borrowing.

This apparent silence by Treasury (and to a lesser extent Tascorp) as UTAS moved towards issue of the Green Bond, through November 2021 to March 2022 defies belief and will be a particular focus of my request for review of Treasury’s decision on my RTI application.

I would have thought, however, that if the Treasurer had provided an appropriately worded approval to UTAS (in response to UTAS requests), relevant documents would have been released (with redactions as necessary) or listed among documents not provided (ie totally exempt).

It is possible that after UTAS has issued the Green Bond a backdated approval was subsequently issued by the Treasurer, but this also should have been provided or listed as totally exempt by Treasury.

It has been put to me that if there was not an appropriate borrowing approval in place before UTAS issued the Green Bond that it may have been in the interest of the various parties to cover this up. UTAS and the Treasurer/Premier need to provide a full explanation of what happened, and all relevant documents should be released.

Possible Government/UTAS excuse

It is possible that the Tasmanian Government and UTAS will argue that the conditional borrowing approval provided by Mr Gutwein to VC Black on 3 March 2021 was adequate for issuance of the Green Bond.

I believe that this is wrong and would leave UTAS and the State open to legal challenge.

That conditional approval was predicated on UTAS maintaining its debt facility of $200 million with Tascorp and one of the conditions set by Mr Gutwein was that

“the [additional] $200 million borrowing facility limit will reduce over time consistent with the maturity profile detailed in the University’s request.”

This maturity profile will have been made redundant by UTAS’ decision to borrow $350 million from the market and refinance its debt with Tascorp. As UTAS issued 10-year bonds for $280 million (ie to 2032) and 20-year bonds for $70 million (maturity 2042), this will simply not match the maturity profile. The final maturity date is also different from the final maturity date of 2046 originally contemplated by UTAS.

  • When negotiating with Tascorp, UTAS also seems to have been seeking a total loan facility of $325 million and an overdraft facility of $75 million.

The language of the conditional approval also seems to have been predicated on UTAS borrowing the additional $200 million from Tascorp as Mr Gutwein refers repeatedly to a “borrowing facility limit”, including crucially when he says:

“I approve the request to increase the University’s borrowing facility limit [subject to the conditions that then follow]”

and then in the condition:

“the increase of $200 million to the existing borrowing facility limit is approved solely for the purposes of the construction of the Southern Infrastructure Project” [my underlining]

This language is appropriate for the type of arrangement UTAS might have had with Tascorp, but it is entirely inappropriate for the Green Bond, which is not a borrowing facility. A loan from Tascorp is a facility but in market usage, a debt capital raise is not. 

Another question is whether UTAS’ Green Bond debt overlapped with debt from Tascorp as part of the refinancing process – that is, did UTAS’ borrowings exceed $400 million at any stage?

  • Even if UTAS had no overlapping borrowings through Tascorp at the time, there might still be an issue if the Tascorp facility had not been formally closed.

I suggest that any reliance on the conditional borrowing approval of 3 March 2021, would not only be wrong but could expose the Tasmanian Government to serious risk. It may be relevant that two legal advices are listed among the documents identified as relevant but exempted in their entirety by Treasury.

A surprising aspect of UTAS apparently proceeding to issue debt without an appropriate approval under section 7(2) of the UTAS Act in place would be the failure of NAB and the Commonwealth Bank (the Managers of the Green Bond issue) to detect this in their due diligence processes.

UTAS and Tascorp

It is clear from the timeline above that UTAS was not able to agree to the terms required of it by Tascorp in relation to the additional $200 million and indeed ended up refinancing the borrowing it had had from Tascorp.

There is a question as to whether UTAS’ concerns as put forward by VC Black to Mr Gutwein were valid. Reading between the lines, it is clear that there was tension between UTAS and Tascorp, between UTAS’ bridling at the conditions Tascorp was seeking to impose on UTAS’ borrowings and what Mr Gutwein called Tascorp’s action “to mitigate risks to the State where possible“.

In deciding to go to the market for its debt, rather than Tascorp, did UTAS make savings or losses. Did it advise the Government on this matter?

The UTAS Council

At the bottom of this post, I have appended records of the UTAS’ Council’s consideration of the Green Bond as recorded in Minutes released to me under RTI (Appendix 2). However, it should be noted that these only go up to 4 April 2022.

In agreeing to UTAS accessing the market for debt it should have been of prime concern to the UTAS Council that its legal obligations, particularly its obligation under section 7(2) of the UTAS Act had been met.

Indeed ensuring an appropriate borrowing approval from the Treasurer is so important that Council resolutions might have been expected on the matter.

For example, before deciding to go to the market, it might have been expected that there would be a resolution such as:

“The Council agreed that an unconditional borrowing approval should be sought from the Treasurer that fully reflected UTAS’ planned borrowings, including refinancing of its Tascorp borrowings.“

Upon receipt of such an approval it would also have been appropriate to note this in a resolution.

While there are redactions in the relevant UTAS Council minutes in the period October 2021 to April 2022, such resolutions are conspicuously missing, and it also seems unlikely that consideration was given to the need for an appropriate loan approval (surely there would have been actions taken – reflected in resolutions – if there had been such consideration).

Guarantee of UTAS’ debt

While UTAS’ borrowings are approved by the Tasmanian Treasurer (or, at least, should be), Moody’s rating for UTAS assumes that there is an implicit Commonwealth guarantee for UTAS’ debt.

The result of UTAS’ Green Bond issue and debt refinancing is that it has moved from a situation where it had a debt facility for $200 million with Tascorp, underpinned by an explicit guarantee by the Tasmanian Government to having debt of perhaps $400 million, with $350 million of that supported, according to Moody’s, by an implicit Commonwealth guarantee.

This may be a satisfactory outcome for UTAS, the Tasmanian Government and Tascorp. The Commonwealth Government is likely to view the matter differently, especially if it was not consulted.

Is the Green Bond green?

In a nutshell, no. UTAS only had to meet some very narrow tests to be able to call the Bond green. No consideration was given to upstream or downstream CO2 emissions – such as unnecessary destruction and construction of buildings and traffic impacts. The Green Bond is the very type of corporate posturing that has recently received much skepticism.

I have written on this issue at greater length in:

Why has UTAS issued a Green Bond rather than using TASCORP?

UTAS lacks any credibility on CBD move, Question 4

Appendices

Appendix 1 – UTAS Tascorp Borrowings

2018

2019

2020

2021

Borrowings beginning of year

Current

$0

$0

$68,600

$0

Non current

$93,600

$93,600

$125,000

$125,000

Total

$93,600

$93,600

$193,600

$125,000

Proceeds from borrowings

$0

$100,000

$0

$70,000

Repayments

$0

$0

-$68,600

-$125,000

Borrowings end of year

Current

$0

$68,600

$0

$70,000

Non current

$93,600

$125,000

$125,000

$0

Total

$93,600

$193,600

$125,000

$70,000

Tascorp facilities

Loan total

$100,000

$125,000

$125,000

$70,000

Overdraft total

$50,000

$75,000

$75,000

$75,000

Used at balance date

$93,600

$193,600

$125,000

$70,000

Table compiled by John Lawrence from UTAS Annual Reports for 2018, 2019, 2020 and 2021.

Appendix 2 – Excerpts from UTAS Council Minutes

Meeting of 4 December 2020

Meeting of 30 April 2021

Meeting of 25 June 2021

Meeting of 30 July 2021

Meeting of 28 October 2021

Meeting of 3 December 2021

Under Item 4.2 Update on the Financial Masterplan:

Meeting of 23 February 2022

Meeting by circulation of 4 April 2022

By : Robert Hogan