Downer refinances sustainability-linked debt facility

The news: Infrastructure giant Downer EDI has completed refinancing more than a third of a $1.4 billion sustainability-linked debt facility. The group has also established a sustainability-linked financing framework.

The numbers: Downer refinanced a $500 million tranche of the $1.4 billion debt facility set to mature in November 2024. The facility comprises four separate facilities with different maturities.

The context: Downer increased its revenues in the last financial year, but its earnings were weighed down by cost escalations, labour shortages and writedowns linked to its Spotlight takeover. The second half of 2023 has been looking better for the firm, having recently won an Australian Defence Force contract alongside joint venture partner CPB Contractors worth an expected $500 million to $750 million for work slated to begin in 2026.

What they said: "The refinancing reduces Downer’s medium-term refinancing risks, provides a more balanced debt maturity profile, and confirms the strength of Downer’s balance sheet," Downer chief financial officer Malcolm Ashcroft said in a statement. "Establishment of the new sustainability linked financing framework is also important, as it enables both existing and future financings to be designated as sustainability linked, providing greater alignment between the Group’s financing and sustainability strategies."