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VHP announces foreign exchange policy


VHP announces foreign exchange policy

Vital Healthcare Management Limited (the Manager), the manager of Vital Healthcare Property Trust (the Trust), today provided further information in relation to the Trust’s Foreign Exchange Policy.

“Historically, the Trust has had a natural currency hedge of around 90%, however with the acquisition of assets in Australia late last year this has reduced to around 60%. The natural currency hedge measures the value of the Australian net assets against the Trust’s borrowings in Australian dollars” said Stuart Harrison, Chief Financial Officer of the Manager. “As a result of this movement in the natural currency hedge, the Board and management recognised that it was prudent and timely to review the existing policy and seek independent advice to reflect: the relatively defensive and conservative nature of the Trust’s activities; the majority of unitholders resident in New Zealand; and the desire to provide stability by reducing the exposure to fluctuations that may arise as a result of exchange rate movements over time” said Mr Harrison.

As a result of the advice, the Board has adopted a Foreign Exchange Policy whereby the natural currency hedge is supplemented with additional currency hedging taking the translation risk hedged to between 90% and 100% of the value of net assets in Australia.

Mr Harrison continued “The implementation of this policy has been timely following a period of cyclically low Australian dollar v New Zealand dollar exchange rates.” The difference between the natural currency hedge and the overall translation hedge will require the Trust entering into Forward Exchange Contracts. Those contracts will align with the Trust’s interim and annual balance dates.

– ENDS –

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