Brisbane Airport secures $500 million of new bank facilities
24 October 2011
Brisbane Airport Corporation (BAC) today announced that it had reached agreement with Commonwealth Bank ($150m), National Australia Bank ($150m), Bank of Tokyo Mitsubishi ($100m) and Mizuho ($100m) providing, in total, $500m of bank facilities to September 2015. Offers of close to $1 billion were received.
Mr Tim Rothwell, BAC Chief Financial Officer, said he was pleased with the strong support and competitive margins obtained from four of the major Australian and Asian banks.
“These new facilities replace $550m of bank facilities raised during the GFC at higher margins, which were originally repayable over the next couple of years.“Together with April’s $400m USPP and $200m Australian bond issues repayable between 2019 and 2026, these new facilities are the final part of a long-term refinancing strategy of diversifying funding sources, extending tenor and targeting no more than 20% of forecast debt for repayment in any one year,” he said.
Following the damage caused to a number of organisations that relied only on one source of debt, or had the majority or all of their debt facilities repayable at the same time during the GFC, BAC has deliberately and carefully positioned itself to not have to raise further debt until early to mid-2013, prior to repayment of $350m of credit wrapped bonds in December 2013.
“It has been obvious for some time that economic and banking uncertainty in the US and Europe was likely to make lending conditions difficult for at least the next 18 months. BAC is pleased to not be reliant on debt markets in these uncertain times,” Mr Rothwell said.
BAC is 81 per cent owned by Australian superannuation and similar funds and is currently rated BBB by Standard & Poor’s and Baa2 by Moody’s.Maintaining, and even improving, these credit ratings over-time is a key part of BAC’s strategy, enabling it to raise funds in local and overseas bond markets.“This is vital if BAC is to fund the new $1.3 billion runway, construction of which is due to start mid-2012, and other infrastructure over the next 10 years, in the private sector,” Mr Rothwell said.
For the last 14 years, since the airport was privatised, no financial contribution has been made by any level of government to Brisbane Airport’s infrastructure and, with careful financial management and modest increases in passenger charges, this will continue to be the case.