The building materials company Fletcher Building has simplified its funding structure while its debt continues to exceed the target range.
Fletcher Building prepaid all outstanding United States Private Placement (USPP) notes and associated cross-currency interest rate swaps.
“The decision to exit the USPP market simplifies the funding mix and lowers the effective interest rate. The USPP prepayment includes the termination of associated cross-currency interest rate swaps and a make-whole payment, representing cash costs of $6.7 million and $0.5 million, respectively,” a statement said.
“As part of the refinancing strategy, Fletcher Building has also established a two-year $200m club facility on 10 September 2025 to strengthen our liquidity position and extended its $325m Tranche C of the Syndicated Facility Agreement for four years on 31 October 2025. The next material debt maturity is in FY28.”
Changes to its funding structure would provide greater flexibility, reduce the ongoing cost of capital, and support its strategic reset, Fletcher Building managing director Andrew Reding said.
According to Reding, there were no internal concerns about compliance with its standard bank covenant level.
However, dividend payments would be paused while debt stayed above its target.
“We remain committed to reducing leverage and ensuring the business is well positioned to navigate current market conditions and return to sustainable, long-term performance,” he said.