Australian airport group secures $427m of new debt

The IFM and Palisade-backed operator of Darwin and Alice Springs Airports has secured a third round of debt financing from banks and its first from the institutional debt market.

Northern Territory (NT) Airports, backed by Australian managers IFM Investors and Palisade Investment Partners, has secured A$577 million ($427 million; €379 million) in new debt facilities from institutional investors and banks. 

The Australian-owned airport company, owner and operator of Darwin International and Alice Springs Airports, has placed A$150 million in the US institutional debt market with varying terms of 10 and 12 years. 

It has also introduced Canadian Imperial Bank of Commerce to its existing banking group, which comprises Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation. Each bank has provided over A$85 million in facilities with tenures of three, five and seven years. 

The proceeds will be used to refinance existing maturing debt and fund capital expenditure for NT Airports over the next three years. 

The company is jointly owned by Australian investment managers IFM Investors and Palisade Investment Partners. Palisade holds a 22.6 percent ownership interest in NT Airports through its Diversified Infrastructure Fund.   

“The refinancing represents a major achievement for our NT Airports, with the varying tenors of bank and institutional debt, of up to 12 years, significantly de-risking the asset. The new capital expenditure facility will underwrite the airports’ major capital expansion programme, designed to optimise return outcomes for our investors and airport customers,” said Julian Widdup, Palisade’s investment director. 

Having grown over the past 18 years of private ownership, the two airports are expected to serve nearly three million passengers with enhanced airport facilities supported by the funding. Today, Darwin Airport is connected to 17 domestic and five international destinations, while Alice Springs Airport has services to eight domestic destinations. 

NT Airports secured A$350 million in 2011 and A$435 million in 2014 of bank facilities from the same banking group.

The IFM-Palisade concession will run until 2098 under a 99-year lease from Australian government.