OREANDA-NEWS. S&P Global Ratings said today that it had affirmed its 'AAA/A-1+' long - and short-term issuer credit ratings on New South Wales Treasury Corp. (TCorp). The outlook on the long-term rating remains negative.

The outlook on TCorp reflects that on its owner, the State of New South Wales. The outlook on New South Wales, in turn, reflects that on the Commonwealth of Australia. The ratings on TCorp reflect our assessment of an almost certain likelihood that extraordinary support would be forthcoming from TCorp's owner and guarantor, New South Wales, in a distress scenario.

In accordance with our criteria for government-related entities, our view of an almost certain likelihood of extraordinary support reflects our assessment of TCorp's:Critical operational role in managing the state's and its authorities' debt, and most of the state's financial assets, and in providing corporate finance advice. In our view, a default by TCorp would have a critical impact for the New South Wales government because TCorp's debt is guaranteed by the state government and TCorp is the sole provider of debt financing to the state and its authorities. Integral link with the New South Wales government, which owns TCorp and provides guarantees to it. TCorp and its owner are so intrinsically linked that we assess the operations of TCorp and its management of borrowings, liquidity, and financial risks when considering the credit rating on New South Wales. TCorp is the central borrowing agency for the New South Wales government, its statutory authorities, and public trading enterprises. TCorp's business strategy is to provide clients with competitive debt funding and offer them other financial and risk management services.

New South Wales guarantees TCorp's payment obligations in relation to its borrowings, the securities it issues, and its derivative transactions under state laws. This guarantee is secured upon the consolidated account of the state.

We do not assign a stand-alone credit profile on TCorp because of the almost certain likelihood of timely extraordinary state government support, and we don't think the role or link of TCorp to its owner is subject to transition risk as it is a nonseverable arm of the state government.

The negative outlook on TCorp reflects that on its owner, New South Wales, and represents at least a one-in-three chance of a downgrade within the next 12-24 months. A lowering of the long-term rating on New South Wales would trigger the same action on TCorp.

We would revise the outlook on TCorp to stable if we took a similar action on New South Wales, provided that we continued to view TCorp's role and link to the state as being unchanged.