DBI Cuts Borrowing Costs Nearly in Half with New $1.07bn Loan Facilities
Dalrymple Bay Infrastructure has secured $1.07 billion in new loan facilities, slashing its borrowing costs and extending debt maturity while maintaining its investment grade rating.
- Secured $1.07bn refinancing replacing higher-cost USPP Notes and revolving credit facilities
- Weighted average margin reduced from 3.26% to 1.56%, saving ~$75m in interest costs through 2030
- Debt maturity extended slightly to 6.32 years with stable credit rating and covenant compliance
- Financing supports ongoing NECAP infrastructure projects with available capacity
- Maintains strong hedging against interest rate and foreign currency risks
Strategic Refinancing to Lower Costs
Dalrymple Bay Infrastructure Limited (ASX, DBI) has successfully closed a $1.07 billion refinancing package, marking a significant step in its proactive debt management strategy. The new facilities replace the company’s 2020 US Private Placement Notes and existing revolving credit lines with more competitively priced debt, reducing the weighted average margin from 3.26% to 1.56%. This move is expected to cut interest expenses by approximately $75 million through to 2030.
Extended Maturity and Enhanced Flexibility
The refinancing slightly extends DBI’s average drawn debt maturity from 6.64 to 6.32 years, maintaining a balanced debt profile while preserving flexibility. The company secured revolving credit facilities totaling A$820 million over three- and five-year tenors, alongside a two-year A$250 million term loan. This diversified banking group now includes four new lenders, broadening DBI’s access to capital markets.
Supporting Growth and Hedging Strategies
Importantly, the new facilities provide sufficient headroom to fund DBI’s ongoing NECAP program, which focuses on capacity expansions at the Dalrymple Bay Terminal, the world’s largest metallurgical coal export facility. DBI also maintains robust hedging arrangements, covering approximately 85% of its drawn debt against base rate fluctuations and fully hedging foreign currency exposures, thereby mitigating financial risks amid volatile markets.
Credit Rating and Market Position
Following the refinancing, DBI’s investment grade credit rating remains intact, and the company continues to operate well within its debt covenant limits. CEO Michael Riches highlighted the refinancing as a key outcome of DBI’s capital allocation review, emphasizing the company’s improved credit position and the opportunity to replace higher-cost, less flexible debt with more favourable terms.
Looking Ahead
DBI plans to monitor market conditions closely over the coming years, with intentions to refinance some 2030-maturing facilities into longer-term debt when advantageous. This ongoing approach to capital management aims to enhance shareholder returns while supporting the company’s strategic infrastructure investments.
Bottom Line?
DBI’s refinancing not only trims costs but also sets the stage for strategic growth and financial resilience.
Questions in the middle?
- What specific terms and conditions will govern DBI’s future refinancing plans beyond 2030?
- How will the refinancing impact DBI’s dividend policy and shareholder returns in the near term?
- What are the potential risks if market conditions shift unfavourably before DBI extends its debt maturities?
