Record Breaking A$1.2b Corporate Debt Issuance by Australian Corporate
(07 December 2020 – Australia) NBN Co has issued A$1.2 billion worth of five-year bonds with a coupon of one percent, marking a high water mark in debt capital markets (DCM) issuance by an Australian corporate.
Following NBN Co raising A$6 billion in Q1 2020 to help fund the upgrade of slower parts of the national broadband network’s legacy copper grid and high criticised ‘fibre-to-the-node’ connections. The sizeable added bond issuance also being directed towards refinancing A$19.5 billion in federal government debt that matures in Q2 2024.
NBN Co was originally seeking to tap DCM for only A$2 billion however resurgent investor interest, combined with the low borrowing rate, enabled the group to negotiate and prompted it to borrow almost four times that value. At a coupon of just one per cent, it is far cheaper than the 3.96 percent it is paying the government with high demand pushing the coupon down 15 basis points from the initial price guidance.
"The issuance was the largest single tranche of debt and the lowest coupon rate ever achieved by an Australian corporate. The transaction provides NBN Co with a strong platform for future bond issuances in Australia and offshore markets" NBN Co said in a statement.
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