Sydney Airport ties up A$1.1bn debt refinancing

Australia’s busiest airport, which is run by former Macquarie executives, has raised more than A$1bn in senior debt facilities, addressing all of its debt that was scheduled to mature next year. The refinancing confirmed the airport’s BBB credit rating.

Sydney Airport has raised approximately A$1.1 billion (€886 million; $1 billion) in new senior debt facilities.

In a statement, owner Sydney Airport Holdings said the new facilities addressed all of the 2013 debt maturities and provided additional liquidity for a forecast capital expenditure programme. As part of the process, the airport had its BBB or equivalent credit rating reaffirmed by each of three rating agencies.

The refinancing comprised $825 million of US144A bonds, maturing in the first quarter of 2023 (100 percent currency hedged and 75 percent interest rate hedged); and A$300 million of bank facilities, half of which matures in the fourth quarter of 2016 and the other half in the fourth quarter of 2017.

“During the refinancing process, Sydney Airport received very strong support from both international and domestic bond and bank markets,” said Sydney Airport Holdings chief executive officer Kerrie Mather in the statement.

She added: “It is very pleasing to address the 2013 maturities 12 months in advance, extend the average maturity of the debt portfolio and achieve all-in pricing well inside the existing average of 6.5%.”

Mather was an executive director at Macquarie Capital for 18 years and was chief executive officer of MAp – which changed its name to Sydney Airport Holdings in December 2011 – since 2002. Previously known as Macquarie Airports, MAp ended a management agreement with Macquarie Group in 2009 through a management internalisation deal.

Last month, Mather was joined in the management team by Stephen Mentzines. He joined as chief financial officer having previously spent four years as head of North American funds at Macquarie Infrastructure & Real Assets until 2011. Prior to that, he had been Macquarie Group’s global chief operating officer.

In October last year, MAp reached financial close on an asset swap agreement with Canada’s Ontario Teachers Pension Plan (OTPP) which gave it an extra 11 percent in Sydney Airport, taking its total stake to around 85 percent. In exchange, OTPP took MAp’s 39 percent interest in Brussels Airport and 30 percent stake in Copenhagen Airport. MAp also received a cash payment as part of the deal.