Sydney Airport Becomes The First To Secure Syndicated Sustainability Linked Loan In Australia

  • May 23, 2019 AEST
  • Team Kalkine
Sydney Airport Becomes The First To Secure Syndicated Sustainability Linked Loan In Australia

ASX-listed Sydney Airport (ASX: SYD) refinanced A$1.4 billion bank debt facilities at lower margins via market-leading syndicated Sustainability Linked Loan. Total Sydney Airport average debt maturity has now extended three months to mid-2025.

The report read that as part of the Sustainability Linked Loan, bank debt facility margins will slightly decrease or increase depending on Sydney Airport’s sustainability performance over time. This was assessed by an independent third party, Sustainalytics, which is a leading specialised investment research and ratings provider dedicated to ESG globally.

Sydney Airport CEO Geoff Culbert said, “The Group is proud to demonstrate continued leadership and innovation across finance and sustainability, proactively refinancing its bank debt facilities by way of a market-leading Sustainability Linked Loan.”

This outlines the company’s direct link between its sustainability performance and the cost of capital. Sydney Airport’s Sustainability Linked Loan represents the first syndicated Sustainability Linked Loan in Australia, the largest syndicated Sustainability Linked Loan across the Asia Pacific and largest syndicated airport Sustainability Linked Loan globally.

Mr Culbert added that “In addition to delivering strong capital management outcomes, Sydney Airport continues to demonstrate its commitment to sustainability, in this case by providing a direct link between our sustainability performance and our funding costs.”

He further expressed his gratitude for each bank who partnered with SYD to provide A$1.4 billion of sustainability-linked funding.

Current Debt and Liquidity Position of SYD:

Sydney Airport confirmed a strong liquidity position, providing significant capital management flexibility to the company. Over A$1.2 billion of liquidity reportedly remains available with the company to cover debt maturities and to fund planned ongoing investment.

Debt Portfolio of the company has been strengthened further with the establishment of A$570 million (3 years), A$530 million (4 years) and A$300 million (5 years) tranches maturing over 2022-24. Overall debt maturities over 2021-22 reduced by 38% with next major maturity in late-2020, as per the report.

Debt Portfolio of Sydney Airport (Source: Company’s Report)

A quick look over the company’s Traffic performance in April 2019:

In April 2019, Sydney Airport’s international passengers' number outperformed the previous corresponding period, registering a growth of 2.5% monthly growth to 1.4 million passengers. To the contrary, the domestic business of the company experienced a downside in the month due to subdued load factors and continued capacity management by airlines.

Sydney Airport CEO Geoff Culbert said “International passenger growth was positively impacted by the shift in Easter timing. The company witnessed a double-digit growth from both the United States and Filipino travellers, increasing 13.2% and 12.1% respectively.”

Top 10 Nationalities Travelling Through Sydney Airport (Source: Company’s Report)

Year-to-Date Performance of the company explains 1.8% decline in domestic passenger numbers and 1.2% growth in international passengers, taking the company’s overall traffic performance to -0.7% to 14.69 million passengers, as per the report dated 20 May 2019.

Stock Performance:

SYD stock price declined by 0.133% to last trade at $7.510 on 23 May 2019. Over the past 12 months, the stock witnessed a positive price change of 6.82%, including an upside of 4.88% in the past three months.

The stock closed at a price to earnings multiple of 45.490x with a market capitalisation of $16.97 billion as on 23 May 2019.

Also Read: SYD Traffic Performance for March 2019


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