Bank debt refinancing completed

channelnz.com


NZX RELEASE

11 November 2022

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.
1
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
2
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
3
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.”


1
Average tenor calculated on the assumption that the subordinated notes are redeemed at their reset date in March
2024 (noting that the Company may either exercise a right to redeem the notes or a right to offer new conditions to the
noteholders).
2
Based on expected average level of borrowings of c$300 million in FY23, fixed debt costs ($115 million of interest rate
hedging swaps and $175 million of fixed rate bonds) and current Bank Bill Rate (BKBM) for unhedged debt. Excludes
non-cash interest costs (i.e. unwinding of interest associated with provisions).
3
$75m currently in place with additional $40m of forward swaps commencing from January 2023.

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“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.

Appendix I – Debt maturity profile




- ENDS -

Authorised by:
Chris Bougen
General Counsel and Company Secretary
Investor Relations contact:
Anna Bonney
investorrelations@channelnz.com

Media contact:
Laura Malcolm
communications@channelnz.com
+64 21 02363 297
Subordinated notes -
reset date
Subordinated notes -
maturity date
0
20
40
60
80
100
120
140
160
180
20242025202620272034
$M
Bank debtSubordinated debtRetail bonds

channelnz.com
About Channel Infrastructure NZ
Channel Infrastructure is New Zealand’s leading fuel infrastructure company.
Channel Infrastructure owns critical infrastructure, supplying the Northland and Auckland markets, which
make up 40% of New Zealand’s transport fuel demand and all of the jet fuel to the Auckland International
Airport. Utilising the deep-water harbour and jetty infrastructure at Marsden Point, as well as 280 million
litres of storage tanks, and the 170-kilometre pipeline from Marsden Point to Auckland we receive, store, test
and distribute fuel owned by our customers. Channel Infrastructure’s wholly-owned subsidiary, Independent
Petroleum Laboratory Limited, provides fuel quality testing services at Marsden Point and around New
Zealand.
Channel Infrastructure is well positioned to support New Zealand’s changing future fuel needs, with growth
opportunities at the Marsden Point site including additional fuel storage to support fuel security, renewable
electricity supply through the Maranga Ra solar project, and work underway with customers and partners on
biofuel and hydrogen opportunities.
For more information on Channel Infrastructure, please visit: www.channelnz.com