Singtel's Optus Secures A$1.95 Billion Credit Facility from 12 Banks

Singtel's wholly-owned subsidiary, Optus Finance Pty Limited, has secured a significant A$1.95 billion credit facility from a group of 12 banks. This three-year committed revolving credit facility will be used for general corporate purposes and refinancing of existing facilities, according to a press release. The facility is guaranteed by Optus and certain of its subsidiaries, further strengthening Singtel's financial position.

The credit facility aligns with Singtel's strategic shift towards unlocking infrastructure asset value and developing new growth engines. By securing this facility, Singtel gains financial flexibility to invest in its 5G network, expand its digital services, and explore new opportunities within its current ratings. The company has demonstrated proactive leverage management, reducing its reliance on debt to fund growth and instead focusing on bringing in capital partners and monetizing assets.

Singtel's divestment of non-core assets, such as its stake in Airtel Africa PLC and Amobee Group Pte. Ltd., has generated significant funds, improving the company's debt-to-EBITDA ratio. The recent announcement of the sale of a 3.3% stake in Bharti Airtel Ltd. will further enhance Singtel's financial health, with the proceeds expected to improve its debt-to-EBITDA ratio by 0.4x. This improvement, coupled with the new credit facility, positions Singtel to navigate its growth aspirations and 5G capex while preserving its financial strength.



The stable outlook reflects our view that Singtel will actively manage leverage such that its debt-to-EBITDA ratio stays below 2.5x on a sustained basis, while maintaining its fundamental business strength. The credit facility, along with Singtel's proactive leverage management strategy and divestment of non-core assets, supports the company's commitment to maintaining a sustainable balance sheet.

In conclusion, Singtel's Optus has secured a substantial A$1.95 billion credit facility from 12 banks, further bolstering the company's financial position. This facility, combined with Singtel's proactive leverage management strategy and asset recycling efforts, supports the company's strategic shift towards unlocking infrastructure asset value and developing new growth engines. With a stable outlook and a commitment to maintaining a sustainable balance sheet, Singtel is well-positioned to navigate its growth aspirations and 5G capex while preserving its financial strength.