[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-392678-105":53,"doc-detail-392678-en":126},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":119,"head_meta":121,"extra_data":123,"updated_unix":125},105,"en","debt-risk-premium-process-for-updating-in-excel-appendix-6-drp-process","Debt risk premium process for updating in Excel - Appendix 6 - DRP process","","Appendix 6 details an Excel-based operating procedure for updating debt risk premium (DRP) estimates. It explains how stakeholders can replicate deterministic calculations using specified Excel and Bloomberg tools, while noting Excel provides only an approximate DRP and the ERA primarily relies on an R-based method. The framework covers estimating returns on debt components, forming a 10-year trailing average, and executing seven steps: benchmark selection, data collection and AUD conversion, yield averaging, curve estimation, cost of debt, DRP calculation, and updating prior approved values.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":46,"@type":70,"position":76},"https://docshare.wps.com/template/paper-templates/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/debt-risk-premium-process-for-updating-in-excel-appendix-6-drp-process/392678/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/debt-risk-premium-process-for-updating-in-excel-appendix-6-drp-process/392678.png","ImageObject",442,249,{"name":88,"@type":89},"RuangKosong","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-15","2026-09-25",true,{"@type":98,"interactionType":99,"userInteractionCount":9},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"How is the DRP estimated in the Excel process?","Question",{"text":108,"@type":109},"The DRP uses a 10-year trailing average made up of the current-year DRP and each of the nine prior years. The Excel estimate must be updated each year.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"What are the inputs required for running the Excel DRP process?",{"text":113,"@type":109},"The process requires a Bloomberg Anywhere subscription, Excel 2013 or above, and the Bloomberg Excel Add-in with Excel Solver add-in and Excel Analysis Tool Pack.",{"name":115,"@type":106,"acceptedAnswer":116},"What are the seven steps used to calculate the DRP in the Excel workflow?",{"text":117,"@type":109},"The steps are: determine the benchmark sample; collect data and convert yields to AUD; average yields over the averaging period; estimate curves; estimate cost of debt; calculate DRP by subtracting the 10-year IRS rate; then perform the 10-year trailing average update.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},392678,1792101940,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":45,"category_name":46,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":9,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":135,"language":136,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":137,"faqs":138,"seo_title":139,"seo_description":61,"update_tm":140,"read_time":25},962090883219,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","Appendix 6 DRP process for updating in Excel  \n1. Estimating DRP  \n1. This appendix sets out the operating procedure for updating debt risk premium (DRP) estimates using Excel (Excel DRP process) .  \n2. In estimating the DRP, the ERA will solely rely on the R statistical process (R DRP process) detailed in the accompanying document. The estimation of the DRP through R is better implemented and maintained, and statistically more robust than Excel.  \n3. To provide stakeholders with accessibility options, the ERA also provides this Excel DRP process. However, the ERA will not rely on this Excel DRP process and the Excel DRP estimate will only provide an approximate DRP estimate.  \n4. As an Excel template is being provided that prepopulates formulas, at a high-level the information in this document can be divided into two categories:  \n􀁸 background information on the DRP process or template  \n􀁸 information related to actionable steps for the purposes of estimating the DRP (for ease of reference this information is highlighted) .  \n5. Subscription, software and add-in requirements for the Excel DRP process include:  \n􀁸 Bloomberg Anywhere Subscription  \n􀁸 Excel 2013 or above  \n􀁸 Bloomberg Excel Add-in; Excel Solver Add-in and Excel Analysis Tool Pack.  \n2. Framework for return on debt  \n6. The ERA has determined that the return on debt will be estimated as the sum of the:  \n􀁸 risk free rate  \n􀁸 spread of the bank bill swap rate over the risk free rate (BBSW spread)  \n􀁸 DRP  \n􀁸 debt raising and hedging costs.  \n7. The risk free rate, BBSW spread and the debt raising and hedging costs are estimated for the term of the regulatory period, that is, five years. These three components are estimated once every five years at the start of the regulatory period, so do not require annual updating.  \n8. The DRP is estimated using a 10-year trailing average consisting of a DRP for the current year and an annual DRP for each of the 9 prior years. The DRP estimate must be updated each year.  \n9. The DRP for each yearly update is based on:  \n􀁸 a term to maturity of 10 years  \n􀁸 the determined benchmark credit rating 1  \n􀁸 ERA’s revised bond yield approach  \n􀁸 a corresponding 10-year bank bill swap rate estimation.  \n10. The ERA’s revised bond yield approach uses international bonds that have their country of risk identified by Bloomberg as Australia to estimate the cost of debt each year. The DRP represents the risk spread of the cost of debt estimated over the 10-year bank bill swap rate estimation in any given year.  \n11. The DRP estimates are based on a pre-determined averaging period. For illustrative purpose, this document uses 20 Sydney trading days2 which is consistent with Gas Rate of Return Guidelines.  \n1 For illustrative purposes , this document uses BBB+ credit rating which is consistent with the Gas Rate of Return Guidelines.  \n2 With the trading days accounting for missed days due to the eastern states’ public holidays.  \n3. High-level steps to estimate the DRP  \n12. The ERA’s approach to estimating DRP is designed so that a stakeholder can replicate the calculation.  \n13. Once the settings and spreadsheet templates have been established in Bloomberg and Excel, the estimation process is deterministic.  \n14. The DRP estimation process consists of the following seven steps:  \n1. Determining the Benchmark Sample  \n- Identifying a sample of bonds based on the benchmark sample selection criteria.  \n2. Collecting Data and Converting Yields to Australian Dollar Equivalents  \n- Collecting data for the benchmark sample of bonds over the averaging period. This data represents a ‘time series’ of yields related to each bond.  \n- Converting yields for bonds denominated in foreign currencies into Australian dollar (AUD) .  \n3. Averaging Yields over the Averaging Period  \n- Calculating an average AUD equivalent bond yield for each bond across the averaging period.  \n- Creating a static copy of AUD yield data, remaining term to maturity and AUD face v","cbCailvbZYl1ywQb","https://ap.wps.com/l/cbCailvbZYl1ywQb","pdf",1387684,43,"English","# Estimating DRP\n## Framework for return on debt\n## High-level steps to estimate the DRP\n# Excel template","[{\"question\":\"How is the DRP estimated in the Excel process?\",\"answer\":\"The DRP uses a 10-year trailing average made up of the current-year DRP and each of the nine prior years. The Excel estimate must be updated each year.\"},{\"question\":\"What are the inputs required for running the Excel DRP process?\",\"answer\":\"The process requires a Bloomberg Anywhere subscription, Excel 2013 or above, and the Bloomberg Excel Add-in with Excel Solver add-in and Excel Analysis Tool Pack.\"},{\"question\":\"What are the seven steps used to calculate the DRP in the Excel workflow?\",\"answer\":\"The steps are: determine the benchmark sample; collect data and convert yields to AUD; average yields over the averaging period; estimate curves; estimate cost of debt; calculate DRP by subtracting the 10-year IRS rate; then perform the 10-year trailing average update.\"}]","Debt risk premium process for updating in Excel - Appendix 6 - DRP process | PDF",1790372613]