Aerial shot of Kinetic's Sunshine West depot

Infrastructure

Supporting the growth of a leading operator of zero-emission buses

Macquarie Capital acted as sole financial adviser to Kinetic Group Services Pty Ltd (Kinetic) on the optimisation of its debt facilities across its Australian and New Zealand operations.

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Sector Infrastructure
Sub-sector Transport
Location Australia and New Zealand

Opportunity

Kinetic, owned by OPTrust and funds managed by Foresight Group, is a leading mass transit services operator in Australia and New Zealand, operating over 167 long-term bus contracts across 105 depots, covering urban and regional services and specialist capabilities such as airport, school and charter services.1

In Australia, Kinetic operates one third of Melbourne’s bus network.1

Kinetic is an industry leader in the electrification of bus fleets and depot networks. The requirements for zero-emission bus readiness,2 and substantial associated capital costs, provided the opportunity to transition Kinetic’s debt package from leverage financed to a core-plus infrastructure.

Approach

Macquarie Capital acted as sole financial adviser, leveraging our deep infrastructure and debt markets expertise to successfully reposition Kinetic’s credit.

The Macquarie team showcased to lenders the high levels of government contracting, low patronage risk, cost pass through nature of contracts, and significant barriers to entry.

As a result, we were able to execute the first infrastructure debt repositioning of scale for a private bus company in Australia and New Zealand.

Outcome

Kinetic has set ambitious decarbonisation goals of 100 per cent net zero emissions by 2035 in Australia and New Zealand, and by 2045 for United Kingdom, as well as a 100 per cent electric bus fleet globally.2

By entering into the ~$A1.6 billion facilities, Kinetic is now better positioned to fund its strong growth pipeline and meet its decarbonisation goals. This includes decommissioning diesel buses and replacing them with zero emission buses within the Australia and New Zealand transport network and launching a leading all-electric bus depot.2

We are pleased to have supported Kinetic in repositioning their credit to reflect its infrastructure features. This enhances Kinetic’s debt margins and capacity, opening up funding for the electrification of their bus fleet and depots.”

Iain Melhuish
Head of Debt Capital Markets, ANZ
Macquarie Capital

Tom Butcher
Head of Infrastructure, APAC
Macquarie Capital

No. 1

Kinetic operates Australia and New Zealand’s largest private bus network3

~300

battery electric buses (BEBs) in operation in Australasia in 20232

~$A1.6b

Syndicated Facility Agreement

11

new lenders to Kinetic credit

  1. ‘Our Story’, Kinetic, April 2024
  2. ‘Zero Emissions’, Kinetic, April 2024
  3. Kinetic, April 2024, https://www.wearekinetic.com/

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