Lendlease begins redemption of bonds worth about $1.22 billion by November 30
Key Facts
Lendlease announced on November 13 that it had begun redeeming bonds with an aggregate principal of about $1.22 billion, with completion due by November 30, 2026, under the terms of the bonds. The company said the process would be funded by a committed standby facility worth $1.25 billion, secured in June 2026. The group expects liquidity to exceed $2.5 billion after the redemption, including cash and undrawn committed facilities. Lendlease described the process as part of its ongoing capital management initiatives. The bonds targeted include instruments denominated in several currencies, including the Australian dollar, Singapore dollar and pound sterling.
The redemption list includes an Australian green bond worth 500 million Australian dollars and fixed-rate bonds worth 300 million Singapore dollars. It also includes an Australian green bond with a face value of 300 million Australian dollars, with 270.98 million Australian dollars of principal outstanding. The list covers an 80 million Australian dollar private placement. It also includes a green bond with a face value of 250 million pounds sterling, of which only 14 million pounds sterling of principal remains outstanding. These values show that the package combines issues from different markets and currencies, while the announcement puts their aggregate principal at about $1.22 billion without specifying the type of dollars.
The company estimated early compensation payments to bondholders at about $7 million. It added that costs to terminate hedges associated with unwinding interest-rate hedges amount to about $50 million. These amounts are due to be recorded in the Capital Release unit as non-recurring financing costs during the period. These items are costs associated with the redemption, in addition to repayment of the bonds' principal. The announcement did not specify the currency of the compensation and hedge termination amounts in the information provided here.
In its latest half-year results available before the announcement, Lendlease reported net debt of 3.315 billion Australian dollars in the first half of fiscal 2026, compared with 3.433 billion Australian dollars in fiscal 2025. The gearing ratio to tangible assets fell to 25.8% from 26.6% over the two comparable periods. Committed liquidity was 3.3 billion Australian dollars in the first half of fiscal 2026, comprising 650 million Australian dollars in cash and equivalents and 2.6 billion Australian dollars of available undrawn debt. In its June update, the company said it expected underlying gearing to be in the mid-30s percentage range by the end of fiscal 2026. It attributed that outlook at the time to transaction timing and more challenging market conditions.
The June update also cited about 1 billion Australian dollars in development and land payments in the second half of fiscal 2026. The company expected a material reduction in Capital Release unit outflows during fiscal 2027. It said proceeds from asset recycling would be directed primarily toward reducing debt. These plans provide context for the bond redemption as part of financing management, while the redemption statement did not announce a specific change to gearing expectations or another use for the standby facility. Lendlease confirmed that the process is proceeding under the terms of the bonds, with completion targeted for the end of November.
The company said it would "continue to assess opportunities to optimise its funding mix and access the debt capital markets where appropriate." The assessment follows the use of the committed standby facility to fund the redemption process, according to the announcement. Lendlease is scheduled to hold its annual general meeting on November 25, 2026, before the expected completion date of the redemption on November 30. The announcement did not say whether the company would issue new debt, and referred only to assessing appropriate opportunities. The announced completion date remains subject to the terms of the bonds.