Australian/NZ Rates Strategy: TCorp & QTC up next week

Research evidence excerpt

Australian/NZ Rates Strategy: TCorp & QTC up next week

Global Research

20 June 2026ab

Australian/NZ Rates Strategy Interest Rates

AustralasiaTCorp & QTC up next week

Nic Guesnon, CFA

Strategist

nic.guesnon@ubs.com

TCorp's budget outlook has deteriorated since our preview; UBS now expect +61-2-9324 2192

a deterioration of around $1bn in FY26; &, $2bn in FY27. Kieran Kelly

Associate Analyst

While this will lift TCorp's funding task, the envelope will still remain kieran.kelly@ubs.com

considerably smaller than their peers QTC & TCV. Furthermore, FY27 is likely +61-2-9324 2107

to bring inaugural offshore bond issuance for NSWTC (EUR/CHF), which

should offset any modest upward revisions to their FY27 funding task.

In our view, TCorp's credit stands above QTC & TCV; but mid-sized names

WATC & SAFA now look more attractive.

For QLD's Budget also due on 23 June, UBS don't expect a significant

deterioration and revenues are likely to remain resilient. Although capex and

expenses are a source of upside risk to the funding outlook.

UBS remain overweight QTC given we expect relative economic resilience in a

high inflation/interest rate environment. We prefer owning QTC at the back-

end.

NSW Budget outlook deteriorated ahead; UBS now see a larger miss

Since UBS wrote our TCorp FY27 Budget & funding preview on 21 April, the outlook has

deteriorated for NSW. At the time we had NSW general government budget data until

Feb-26, we now have data to April-26. The latest monthly financial statements for NSW

now imply there is more risk of deterioration in FY26 than we previously saw, especially if

the seasonal pattern of late fiscal year deteriorations follows in May and June. We now

think the FY26 general government budget will deteriorate by around $1bn-$2bn. The