Western Australian Treasury Corporation

About Western Australian Treasury Corporation

Western Australian Treasury Corporation (WATC) is the central financial services provider for the state of Western Australia (WA). WATC works with the state government and its public-sector clients to help achieve sound financial risk management consistent with the government’s goal of financial and economic responsibility.

WATC’s principal activities involve funding and debt management, asset and investment management, financial advisory services, financial risk management and treasury management services and systems.

Ownership

WATC is fully owned by the WA government. It is a statutory authority established as the state’s central borrowing authority under the Western Australian Treasury Corporation Act 1986 (WATC Act). In 1998, WATC’s role expanded to include provision of financial management services to WA’s public sector.

Guarantee structure

The treasurer, on behalf of the state, guarantees any financial liabilities WATC incurs or assumes. Any financial liability of the treasurer under the guarantee shall be charged to, and paid out of, the consolidated account of the state, which is appropriated to the necessary extent under section 13(2) of the WATC Act.

Risk policy

All WATC activities are subject to a comprehensive risk management policy that governs the handling of market, credit, liquidity, foreign exchange, operational and reputational risks. WATC identifies and manages all material risks in line with its objectives and board-approved policies.

Funding strategy

To meet WA’s public sector borrowing requirements, WATC maintains access to a range of domestic and offshore funding markets, issuing in fixed- and floating-rate note (FRN) formats. The agency undertakes the bulk of its funding through its domestic fixed-rate benchmark bond programme. It also issues FRNs – to provide longer-term funding for clients – and domestic short-term notes for liquidity management purposes.

SECTOR	SUBSOVEREIGN
CREDIT RATINGS (S&P/M) LONG-TERM AUD	AA+/Aa1 (both stable)
CREDIT RATINGS (S&P/M) LONG-TERM FOREIGN CURRENCY	AA+/Aa1 (both stable)
FOREIGN-CURRENCY PROGRAMMES	Multicurrency EMTN Multicurrency ECP
FOREIGN-CURRENCY ISSUANCE SINCE JAN 2020	A$2bn equivalent (ECP)
TERM FUNDING REQUIREMENT (A$BN)	FY22 FY21 FY20 2.4 8 11
RBA REPO ELIGIBLE	YES
RBNZ REPO ELIGIBLE	NO

At 31 December 2021, WATC had A$38.6 billion of fixed-rate benchmark bonds on issue in 12 lines. At the same date, WATC had A$8.8 billion in FRNs on issue in five lines as well as A$1.2 billion in domestic short-term notes.

WATC taps overseas markets opportunistically through its bond issues and its range of continuous note issuance facilities. At 31 December 2021, WATC had A$2 billion outstanding under its ECP programme and zero outstanding in its EMTN programme. All foreign currency borrowings are swapped back into Australian dollars.

The Australian Prudential Regulation Authority recognises WATC bonds as 0% risk-weighted, level-one high-quality liquid assets. They are repo eligible with the Reserve Bank of Australia.

WATC undertakes its debt issuance by reverse enquiry, tender and syndication through its 12-member fixed-income dealer panel. Issuance of all benchmark bonds, FRNs and short-term notes meets the requirements for exemption from Australian interest withholding tax.