Fletcher Building repayment of USPP notes

Fletcher Building Limited, Private Bag 92114, Auckland 1142, 810 Great South Road, Penrose, Auckland 1061, New Zealand


Fletcher Building repayment of USPP notes
Auckland, 30 June 2020: Fletcher Building today announced its intention to make an
early repayment of US$300 million of USPP notes.
CEO Ross Taylor said that the USPP notes, which were issued in 2012 and due to mature
in 2022 and 2024, were the Company’s most expensive source of debt, with an average
cost of funding of 5.4%. Repayment of the notes would reduce the Company’s funding
costs by cNZ$17 million per year, whilst still leaving the Company with significant liquidity
of cNZ$1.1 billion.
The USPP 2012 notes have a notional value of US$300 million. After taking account of
foreign exchange and interest rate derivatives held by the Company in respect of these
notes, the repayment amount to be made by the Company is expected to be cNZ$350
million.
The repayment includes a ‘make whole’ cost as a result of the early termination of the
debt. This will be partially offset by a receipt by the Company from the favourable unwind
of its interest rate derivatives. The net cost of these two amounts is expected to be cNZ$30
million, which is included in the total expected repayment of cNZ$350 million. The early
re payment costs are more than offset by the avoidance of cNZ$40 million of future interest
payments.
The repayment will be made in late July from the Company’s cash reserves. This
transaction does not affect the Company’s 2016 USPP notes, which have a significantly
lower cost of funding and provide longer-term tenor in the Company’s debt facilities, with
maturity dates in 2026 and 2028.
#Ends
Authorised by:
Andrew Clarke
Company Secretary
For further information please contact:
MEDIA
Christian May
General Manager – Corporate Affairs
+64 21 305 398
Christian.May@fbu.com
INVESTORS AND ANALYSTS
Aleida White
Head of Investor Relations
+64 21 155 8837
Aleida.White@fbu.com