12Transitional guarantee

12 Transitional guarantee

12 Transitional guarantee

(1) During the transitional period, and subject to subsection (5), the payment of all money due by the Bank in respect of specified liabilities incurred by the Bank during the transitional period is guaranteed by the Government of New South Wales.

(2) On and from the day immediately following the expiry of the transitional period, the guarantee created by subsection (1) ceases, except in relation to specified liabilities (other than demand deposits) incurred by the Bank during the transitional period.

(3) The guarantee of any liability that continues after the expiry of the transitional period pursuant to subsection (2) ceases immediately if:

(a) the terms or conditions of the arrangements giving rise to the relevant specified liability are amended or varied, or

(b) any right to extend the relevant specified liability is exercised by the Bank,

unless the Treasurer agrees in writing that the guarantee is to continue despite any such amendment, variation or extension. Any agreement may be given in respect of particular amendments, variations or extensions or in respect of any class of amendments, variations or extensions.

(4) The payment of any money due by a subsidiary of the Bank is not guaranteed under this section.

(5) The payment of money due by the Bank in respect of a specified liability incurred by the Bank during the transitional period is not guaranteed under this section if:

(a) the document or instrument containing the terms and conditions of the specified liability contains a statement to the effect that the obligations of the Bank in respect of the specified liability are not guaranteed by the Government of New South Wales, or

(b) the person who would otherwise have had the benefit of the guarantee has by written agreement with the Bank acknowledged that the specified liability, or a class of specified liabilities of which it is one, is not guaranteed by the Government of New South Wales.