Banks cough up $6.1B for NBN Co
- 12 May, 2020 12:08
NBN Co has managed to source $6.1 billion from Australian and international banks to give it extra “flexibility” amid the coronavirus pandemic.
A third of the debt facility will be drawn from the current $51 billion roll-out budget, with an additional $4.1 billion credit sourced “at very competitive prices”.
The amount exceeds its requested $2 billion, as outlined in its 2020-23 Corporate Plan, and comes off the back “demonstrated … strong support in the market for the NBN business plan and outlook”, according to Finance Minister Mathias Cormann.
“The government had flagged some time ago that it expected NBN Co to pursue debt financing through external markets, including in order to start the process of re-financing its loan with the Commonwealth," he said.
“There is no requirement for NBN Co to draw down on these additional facilities immediately, but the government agrees with the company that it makes sense to have these facilities in place, to give it flexibility and given current economic conditions.”
Of the $6.1 billion, NBN Co “is expected to draw down $2 billion”, according to Minister Cormann.
From the additional $4.1 billion debt facilities, $1.5 billion “will be reserved for working capital to provide the company with added flexibility and to support NBN Co’s long term capital management strategy,” a joint statement from Minister Cormann and Minister for Communications, Cyber Safety and the Arts Paul Fletcher said.
Some of that money could be used by NBN Co to refinance an existing $19.5 billion loan from the Government "without jeopardising [NBN Co's] performance".
“The additional funding will provide the company opportunities to invest and create even more value for Australians guided by future corporate plans,” Minister Fletcher added.