The government maintains it has “commercial advice” that NBN Co will be able to refinance its $19.5 billion loan, though the start date for refinancing is being kept out of public view for now.
The incoming government brief (IGB) prepared by the Department of Communications for the Coalition, colloquially known as the 'blue book', shows that 18 drawdowns on the loan have been made by NBN Co to March 31 this year, totalling $10.824 billion.
NBN Co is anticipated to have drawn down up to $12.48 billion by the end of June this year. The amount is likely to be confirmed in NBN Co's upcoming full-year results.
The loan was given to NBN Co by the government in late 2016 after the network builder was unable to raise debt funding from elsewhere to complete the project.
The loan was initially meant to be refinanced in June 30, 2021 but this was pushed back to June 30, 2024.
NBN Co is also able to look elsewhere for up to $2 billion more under the revised loan agreement.
The loan has been controversial for several years because it is unclear if NBN Co will ever be able to refinance it.
The parliamentary budget office first raised concerns of this nature in December 2016, and they have lingered since.
An Australian National Audit Office (ANAO) report last month criticised the Department of Communications for its oversight of the loan.
Auditors said the department could not produce “details of [any] assessment undertaken to determine NBN Co’s capacity to fully service the loan, ... ongoing monitoring of NBN Co’s compliance with several aspects of the loan agreement … [or] an analysis to progressively assess NBN Co’s capacity to fully repay the loan.”
“The failure to fully establish practices to manage the risks associated with this loan significantly increases the Commonwealth’s risk of exposure to loss,” ANAO warned. [pdf]
“The Commonwealth is the sole shareholder of NBN Co, therefore the recovery of any losses may need to be absorbed by the Commonwealth.”
The blue book provides a different take on assurance processes over the loan.
“As part of its management of the loan, the department monitors and regularly assesses NBN Co’s progress toward its targets and its capacity to refinance its debt,” the department said.
Although the loan was listed under “sensitivities” around the NBN project, the language used by the department suggested repayment was not a concern, given “commercial advice” from NBN Co.
“Shareholder departments have received commercial advice that NBN Co will be able to commence refinancing of the Commonwealth loan in [redacted] and complete a full refinance by 30 June 2024, with refinancing being undertaken in a number of tranches,” the department said.
Some parts of the blue book, released under freedom of information (FoI) but accessible only via request, are redacted, including - presumably - more details of the expected tranching of refinancing.