Gearing

The responsible entity has established a preferred range of 20 to 40 per cent for the Trust's gearing ratio (debt to total assets). The quality of the Trust's lease covenants and the lease expiry profile support this gearing range and allow the effective use of debt funding.

At 31 December 2008, the Trust's gearing was 35.5 per cent.

Interest Rate Management

The Trust has a policy of hedging the majority of its borrowings against interest rate movements to ensure stability of distributions.

The responsible entity continues to actively manage the Trust's exposure to interest rates to ensure a prudent interest rate hedging position. This involved taking out additional cover as required during the year and managing debt repayment to ensure existing hedging remained effective

At 31 December 2008, the Trust's hedging cover was 74.1 per cent of borrowings, with $255.0 million interest rate swaps against interest bearing debt of $344.2 million.  The weighted average term of maturity of hedging was 3.15 years, including delayed start swaps.