Bank debt refinancing completed

Channel Infrastructure (CHI) is pleased to announce that it has now fully refinanced its bank debt, reducing funding costs. This, together with the successful bond issue in May 2022, diversifies funding sources, extends tenor and supports lowering Channel Infrastructure’s cost of capital to align with an infrastructure business.

Channel Infrastructure has refinanced $205 million of bank debt, achieving tenor spread across 3 to 5 years. Total available debt facilities are now $380 million with no maturities within 12 months and an average tenor of 3.6 years. The Group’s net debt as at 31 October 2022 was $230 million, resulting in total headroom of $150 million which provides sufficient capacity to fund the remainder of conversion costs and investment in private storage. It is expected that debt will peak at around $100 to $120 million above current levels in the next 12-18 months.

The refinancing programme has reduced the Company’s cost of bank debt. Financing costs are now expected at the lower end of previous guidance at c.$16 million in 2023 (previous guidance $15 million - $18 million), equivalent to an effective interest rate across all debt of 5 to 5.5%. Channel’s fixed rate bonds and interest rate swaps provide significant funding cost certainty for 2023, in a rising interest rate environment.

CEO Naomi James said “With the refinancing of our bank debt, we have lowered our cost of funding, reflecting the reset of our business model to an infrastructure company with stable earnings and cashflows.”

“We thank ANZ and BNZ for their support through our transition and welcome ASB, CCB and Westpac to our banking group. This refinancing programme has established Channel Infrastructure’s strong presence in both bank and bond markets, which will support future growth plans and provide opportunity to continue to lower the Company’s cost of capital.”

“With our funding costs largely fixed and terminal revenue indexed at PPI, we are strongly placed in the current environment to deliver strong and stable earnings and cash flow from our business, supporting a return to dividends for shareholders next year.”

For details on the debt maturity profile refer to Appendix I.

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Authorised by:
Chris Bougen
General Counsel and Company Secretary

Investor Relations contact:
Anna Bonney
[email protected]

Media contact:
Laura Malcolm
[email protected]
+64 21 02363 297

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Announcement PDF