New Hope proposes hybrid securities with floating-rate distributions

New Hope Flags Potential Hybrid Capital Raising

New Hope Corporation Limited (ASX:NHC) has put a new funding instrument on the table: a proposed offer of subordinated, perpetual and redeemable hybrid securities. The company says floating-rate distributions are expected to be fully franked, but it has not yet disclosed the offer size, pricing, distribution rate or timetable.

The proposal is explicitly conditional. New Hope says the offer may proceed subject to market conditions, and no applications will be accepted until a prospectus has been lodged with the Australian Securities and Investments Commission and the offer has opened.

Terms Remain Open Ahead of Prospectus

That leaves the most important investor questions unanswered. The announcement does not set out the reference rate or margin for the floating distributions, the circumstances in which the securities may be redeemed, or how the proposed issue would affect New Hope’s funding mix. The securities’ subordinated and perpetual features also mean their final terms will matter materially to both income-focused investors and the company’s existing capital structure.

The proposed issue comes after New Hope reported a 63.4% fall in FY26 net profit to A$161.0 million, despite higher saleable coal production and a larger production pipeline. Its earlier financing activity included the issuance of A$300 million in convertible notes due in 2032, but the current announcement does not state whether the proposed hybrids are connected to that transaction or to a particular use of funds.

Australian Retail Eligibility Restriction

The potential offer would be limited to Australian residents. Retail investors would need to fall within the target market determined by New Hope and obtain personal advice from a qualified financial adviser before applying. Applications, if the offer proceeds, must be made through a member of the appointed syndicate.

New Hope expects to appoint Jarden Australia as arranger and joint lead manager, alongside six other joint lead managers and two co-managers. Those appointments are also framed as conditional on the offer proceeding, making the prospectus the next substantive test of whether this is a fund-raising plan or merely an early market signal.