Sydney Airport maintains a strong focus on prudent capital management by proactively diversifying the debt portfolio and addressing the refinancing of debt well in advance of its maturity. This strategy further strengthens the capital structure and creates a strong platform for future raisings.
2016 refinance summary
In April 2016, Sydney Airport successfully issued a USD900.0 million (AUD1,163.4 million) US144A/RegS bond that reinforced our proactive capital management approach. The funds raised were used to repay all committed drawn bank debt facilities used to primarily fund refinancing obligations and investment.
Outcomes of this refinancing that contributed to the key debt metrics were:
- pricing inside the portfolio average with 100% hedging of currency and interest rate exposures;
- maturity profile spread, filling a previous gap in 2026;
- maturity profile lengthened by five months, with average maturity in mid-2023;
- reduction in drawn debt maturities over the next three years by over 75%; and
- next drawn debt maturity is in the first half of 2018; less than 2% of total debt outstanding.
|Category||31 December 2016||31 December 2015|
|Net debt||$7.7 billion||$7.4 billion|
|Cash flow cover ratio||2.7x2||2.5x|
|Credit rating (S&P/Moody’s)||BBB/Baa2||BBB/Baa2|
- Ratio temporarily impacted by partial debt funding of the T3 transaction without the full EBITDA benefit.
- EBITDA excludes WSA project costs expensed.
Funding portfolio by category
Debt maturity on drawn and undrawn debt
Total distributions paid by ASX-listed Sydney Airport during the year ended 31 December 2016 were $624.2 million or 28.0 cents per stapled security (2015: $543.1 million or 24.5 cents).
A final distribution for the period ending 31 December 2015 of $289.8 million or 13.0 cents per stapled security (2014: $266.0 million or 12.0 cents) was paid on 12 February 2016 by:
- SAL $166.1 million or 7.45 cents; and
- SAT1 $123.7 million or 5.55 cents.
An interim distribution for the period ending 30 June 2016 of $334.4 million or 15.0 cents per stapled security (2015: $277.1 million or 12.5 cents) was paid on 12 August 2016 by:
- SAL $212.9 million or 9.55 cents; and
- SAT1 $121.5 million or 5.45 cents.
The final distribution for the period ending 31 December 2016 of $360.0 million or 16.0 cents per stapled security was paid on 14 February 2017 by:
- SAL $237.4 million or 10.55 cents; and
- SAT1 $122.6 million or 5.45 cents.
There are $nil imputation credits (2015: $nil) available to pay franked distributions.
Distribution reinvestment plan (DRP)
The DRP operated in respect of the 30 June 2016 interim distributions. A total of 20.4 million stapled securities were issued and transferred to DRP participants in August 2016 at $6.99 (after a 1.5% discount applied).
There was no DRP in operation for the 31 December 2016 final distribution as the Commonwealth Government had previously indicated its intention to issue Sydney Airport with the NOI prior to 31 December 2016. Depending on the terms contained in the NOI and Sydney Airport’s assessment of them, this circumstance had the potential to place Sydney Airport in possession of information which would be material to the price of Sydney Airport’s securities and not yet available to the market generally.