NBN Co taps debt capital markets for $1.2B raising

NBN Co taps debt capital markets for $1.2B raising

The transaction provides a strong platform for future bonds, NBN Co claims

Credit: Dreamstime

National Broadband Network (NBN) builder NBN Co has managed to achieve what it claims is the largest single tranche of debt at the lowest coupon rate (1.0 per cent) in Australian corporate history after successfully issuing a $1.2 billion five-year benchmark transaction. 

According to NBN Co, a heavily over-subscribed order book drove considerable price tightening, resulting in the final offer price reducing by 15 basis points below the Initial Price Guidance. 

“The final order book comprised 55 high-quality investors, with strong participation from asset managers with domestic accounts dominating overall demand and representation within the order book,” NBN Co said. 

The transaction is due to settle on 3 December 2020 and will mature on 3 December 2025.

The transaction provides NBN Co with a strong platform for future bond issuances in Australia and offshore markets, the network builder claimed.

The debut transaction was followed by the appointment of joint lead managers ANZ Banking Group; Commonwealth Bank of Australia; National Australia Bank and Westpac.

In May, NBN Co managed to source $6.1 billion from Australian and international banks to give it extra “flexibility” amid the coronavirus pandemic. 

A third of the debt facility was drawn from the $51 billion roll-out budget, with an additional $4.1 billion credit sourced “at very competitive prices”.

The amount exceeded its requested $2 billion, as outlined in its 2020-23 Corporate Plan.

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