A$800 million priced across two tranches in inaugural AMTN issuance
The Lottery Corporation (ASX: TLC) has priced A$800 million of senior unsecured notes, marking the company’s inaugural Australian Medium Term Note (AMTN) issuance. The notes were priced on 3 September 2026 and comprise two equal tranches of A$400 million each.
Settlement is expected to occur on 15 September 2026, subject to customary closing conditions. The company stated that the raise is expected to enhance funding diversification and support balance sheet flexibility, with proceeds directed in part towards funding the extension of the Victorian Public Lottery Licence.
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Breaking down the two tranches
The senior unsecured notes will be issued by The Lottery Corporation’s wholly owned subsidiary, L&K Finance Pty Ltd. The issuance is split evenly between a shorter-dated and a longer-dated fixed rate tranche, each carrying a distinct coupon and maturity profile.
The 6-year tranche matures on 15 September 2032 and carries a fixed coupon of 6.326% per annum. The 10-year tranche matures on 15 September 2036 with a fixed coupon of 6.825% per annum.
| Tranche | Amount | Maturity Date | Term | Fixed Coupon (p.a.) |
|---|---|---|---|---|
| 6-year fixed rate notes | A$400m | 15 September 2032 | 6 years | 6.326% |
| 10-year fixed rate notes | A$400m | 15 September 2036 | 10 years | 6.825% |
Key details of the issuance:
- Total raise: A$800 million across two equal A$400 million tranches
- Settlement date: 15 September 2026, subject to customary closing conditions
Why the proceeds matter: funding the Victorian licence
The Lottery Corporation stated that the proceeds of the issue will be used for general corporate purposes, including funding the extension of the Victorian Public Lottery Licence. Long-term lottery licences form a central part of the company’s revenue base, and this raise contributes to funding that licence extension.
The Victorian Public Lottery Licence extension represents a $1,145 million commitment, secured through exclusive bilateral negotiations with the Victorian State Government and pushing the licence expiry from 2028 out to 2068, a 40-year runway that materially reshapes the company’s long-term earnings profile.
Management framed the transaction as part of the company’s broader capital management strategy, noting it is expected to enhance funding diversification and support balance sheet flexibility. Securing funding for a core licence asset through a new debt channel underpins the long-term funding requirements of the business.
Adam Newman, Chief Financial Officer, The Lottery Corporation
“We are pleased with the strong support received from domestic and offshore debt investors for The Lottery Corporation’s inaugural AMTN issuance. The transaction provides access to an important additional funding market, further diversifies our sources of debt capital and supports the long-term funding requirements of the business.”
What is an AMTN and why does it matter?
An Australian Medium Term Note (AMTN) is a standardised debt security that allows a company to raise funds from bond investors over set terms. Rather than borrowing solely from banks, a company can issue these notes to a wider pool of investors, agreeing to pay a fixed interest rate (the coupon) until the notes mature and the principal is repaid.
The notes in this issuance are described as “senior unsecured”. In plain terms, senior debt ranks ahead of subordinated debt for repayment, while unsecured means the notes are not backed by specific collateral. For The Lottery Corporation, accessing the AMTN market for the first time widens its pool of funding sources beyond banks, reducing reliance on any single channel.
Investment takeaways for TLC shareholders
The transaction represents a well-supported capital management milestone. According to the CFO, the raise attracted strong support from domestic and offshore debt investors, a signal of market confidence, while securing diversified debt capital and funding for a core licence asset.
Three key takeaways for shareholders:
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The inaugural AMTN issuance opens a new funding channel for the company beyond its existing debt arrangements.
-
A$800 million was priced across two long-dated tranches, spanning 6 and 10 years.
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Proceeds support the extension of the Victorian Public Lottery Licence.
The next milestone to watch is settlement, expected on 15 September 2026, subject to customary closing conditions.
For investors exploring the leverage and dividend policy changes that accompany this transaction, our deep-dive into the Victorian licence deal and its balance sheet implications covers the pro forma leverage trajectory, the shift from NPAT to NPATA dividend policy, and what the 2068 expiry means for long-term cashflow visibility.
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