Lendlease Prices S$400 Million Perpetual Hybrid Securities with 3.90% Fixed Rate
Lendlease has priced a S$400 million perpetual hybrid securities issue at a fixed 3.90% rate, strengthening its capital structure and preparing for upcoming debt maturities. The move supports its ongoing corporate strategy and regional growth ambitions.
- S$400 million perpetual subordinated hybrid securities priced at 3.90% fixed rate
- Proceeds earmarked for debt repayment and general corporate purposes
- Issue oversubscribed, reflecting strong investor demand
- Hybrid securities expected to be equity-classified, listed on Singapore Exchange
- Supports currency realignment amid upcoming US$ and S$ debt maturities
Strategic Capital Management
Lendlease Corporation Limited has successfully priced a S$400 million issue of perpetual subordinated hybrid securities, marking a significant step in its capital management strategy. The fixed distribution rate of 3.90% per annum until September 2030 reflects a competitive cost of capital in the Singapore dollar fixed income market, where the offer was notably oversubscribed by wholesale investors.
Enhancing Financial Flexibility
The net proceeds from this issuance will primarily be used to repay existing debt and support general corporate purposes. This transaction enhances Lendlease’s financial flexibility, broadening its funding sources and aligning its currency exposure ahead of substantial debt maturities; approximately A$600 million of US dollar-denominated financing maturing in May 2026 and around A$350 million of Singapore dollar-denominated financing due in April 2027.
Regional Growth and Currency Realignment
This Singapore dollar hybrid complements Lendlease’s broader regional activities, including the A$3.4 billion Comcentre development project in Singapore, scheduled for completion in fiscal year 2028. The issuance also reflects a deliberate effort to realign the currency mix of the Group’s funding sources, reducing reliance on US dollar debt and increasing exposure to Singapore dollar funding.
Hybrid Security Features
The securities are perpetual and subordinated, with no fixed maturity date but an optional redemption date in year five. If not redeemed by then, the distribution rate steps up by 200 basis points, incentivizing early redemption while providing Lendlease with flexibility. The hybrids are expected to be classified as equity for accounting purposes, which can positively impact the Group’s leverage ratios. They will be listed on the Singapore Exchange for wholesale investors, further diversifying Lendlease’s investor base.
Outlook and Implications
This capital raising aligns with Lendlease’s ongoing corporate strategy and planned capital recycling initiatives, positioning the Group to navigate upcoming refinancing needs with greater agility. While the market’s reception has been positive so far, the true test will be how this issuance influences Lendlease’s cost of capital and financial metrics in the coming quarters.
Bottom Line?
Lendlease’s hybrid issuance signals a proactive approach to capital management, but investors will watch closely how it balances growth ambitions with debt maturity pressures.
Questions in the middle?
- Will Lendlease redeem the hybrids at the first optional call date in 2030 or extend them?
- How will this issuance affect Lendlease’s credit ratings and borrowing costs?
- What impact will the currency realignment have on the Group’s financial risk profile?
