Downer Faces Refinancing Challenge Ahead of $500 Million Bond Maturity

Refinancing Milestone

Downer EDI Limited has marked a significant step in its financial management by successfully refinancing $1 billion of its $1.3 billion syndicated sustainability linked loan facility. This move not only extends the maturity dates on three of the four tranches but also reflects a strategic resizing of the overall facility from $1.4 billion to $1.3 billion, aligning with the company’s current funding and liquidity needs.

Extended Debt Maturities

The refinancing extends the maturity of $300 million to June 2029, $400 million to June 2030, and a $300 million Asian Term Loan to June 2032. This staggered extension effectively lengthens Downer’s average debt maturity profile to approximately 3.4 years, providing the company with greater financial flexibility and stability in managing its obligations.

Managing Upcoming Debt Obligations

Part of the refinancing proceeds will be used to repay a maturing US Private Placement totaling A$182 million, due in early July 2025. Additionally, Downer faces an Australian Medium Term Note (AMTN) maturity of $500 million in April 2026. To address this, the company has arranged a $400 million bridge facility, offering a buffer and flexibility as it plans for the AMTN refinancing.

Strong Support and Sustainability Focus

The refinancing was supported by a consortium of major banks including Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia, Hong Kong and Shanghai Banking Corporation, and Sumitomo Mitsui Banking Corporation. Notably, CBA and HSBC also acted as Sustainability Coordinators, underscoring the sustainability-linked nature of the loan facility. While specific sustainability metrics were not disclosed, the involvement of these institutions highlights Downer’s commitment to integrating environmental, social, and governance considerations into its capital structure.

Credit Rating and Market Position

Downer currently holds a BBB (Stable) rating from Fitch Ratings, reflecting a solid credit profile supported by improved operating performance and financial position. The successful refinancing and extended debt maturities are likely to reinforce investor confidence and provide a more manageable debt repayment schedule as the company continues to navigate its growth and infrastructure service commitments.