$11.8 billion borrowings and 6.5 year average maturity

Debt maturity extends as refinancing needs remain

Transurban Finance Company Pty Ltd (ASX:TA1) finished FY26 with a slightly improved earnings result, but the more consequential story sits on its balance sheet: $11.8 billion of borrowings, a longer average debt maturity and a substantial refinancing task still ahead. The funding arm reported a $6 million loss before tax for the year ended 30 June 2026, down from $17 million in FY25.

Average debt maturity rose to 6.5 years from 6.1 years, while the weighted average cost of Australian-dollar debt increased to 5.0% from 4.9%. Planned refinancing over the next 12 months includes $825 million of working-capital facilities, $575 million of 144A debt and $12 million of letters-of-credit facilities. Transurban Finance said its funding strategy remains focused on maintaining investment-grade ratings and a diverse pool of funding sources.

New notes add duration and foreign currency exposure

During the year, the company completed US$550 million, or $831 million, of senior secured notes with a 10.5-year tenor and €500 million, or $891 million, of senior secured notes with a 12-year tenor. It also added an $825 million tranche to its syndicated bank facility, with a four-year tenor.

Those transactions helped replace or extend maturing debt, although the structure remains exposed to currency and interest-rate movements. Transurban Finance reported that 85% of interest-rate exposure on drawn borrowings was hedged at year-end, within its policy range of 80% to 100%. Its credit ratings remained BBB+ from S&P, Baa1 from Moody’s and A- from Fitch.

Finance costs fall as hedging movements reverse

Finance income rose 10.7% to $691 million, while finance costs increased 8.4% to $697 million. The resulting net finance cost narrowed to $6 million, primarily because of unrealised remeasurement gains on derivatives, partly offset by unfavourable foreign-exchange movements.

The statutory loss after tax was $4 million, compared with $12 million in FY25. Operating cash flow swung to a $153 million inflow from a $270 million outflow, while cash and cash equivalents ended the year at $294 million. The company also reported $2.49 billion of undrawn working-capital and general-purpose facilities maturing beyond 12 months, with no covenant breaches.

Toll reform enters the accounts as a conditional event

The annual report records the NSW Government’s 3 August announcement that the Direct Deal for proposed NSW Toll Reform had been finalised with private toll-road concessionaires. That disclosure is not an accounting recognition of the deal: implementation remains dependent on formal documentation, conditions precedent and financier consents, and the specific accounting consequences have not yet been determined.

The distinction matters for a financing vehicle whose external debt is on-lent to Transurban Group entities. Related-party receivables totalled $11.9 billion at year-end, making recoverability and the cash flows generated by the wider group central to the finance company’s ability to service its own borrowings. Management said it expected to operate within available liquidity and borrowing terms over the next 12 months, with no forecast covenant breach.