Ann: FY23 Results Presentation, page-27

Why would they want to reduce debt when the cash rate is now 4.35%?

The bonds are only 190bps above cash rate.

They would never be able to raise debt / equity in the current environment at a cost as low as the bonds at 625bps.

They’re better off retaining the bonds and buying back shares with free cash flow. The cost of equity would be significantly higher than their current cost of debt. Buying shares back will make more sense as this reduces cost of capital more than if they paid debt.

What is more likely is they just aren’t generating much free cash flow or maybe they’re spending too much of it on capex.