COUNTRY REPORT AUSTRALIA5.25-year Tier 2 notes on August 24 2017 at
three-month BBSW plus 180bp.
› OCBC SYDNEY SELLS FLOATERS
OVERSEA-CHINESE BANKING CORP , Sydney branch
(Aa1/AA–/AA–), sold last Monday A$300m
of three-year floating-rate notes inside the
62bp area price guidance at three-month
BBSW plus 60bp.
ANZ , CBA , NAB , OCBC and Westpac were
joint lead managers on the bank’s first local
issue since selling A$500m of one-year FRNs
on February 15.
OCBC Sydney previously issued A$300m
of four-year floaters on March 10 2016.
› AUSGRID MARKETS LOCAL DEBUT
AUSGRID has mandated Mizuho , NAB and
Westpac for investor meetings in Sydney,
Melbourne, Singapore, Hong Kong and
Tokyo from October 9 ahead of a potential
debut offering of Australian dollar bonds.
The electricity infrastructure company,
rated Baa1 (Moody’s), granted last October
a 99-year lease of its assets, with the New
South Wales government holding a 49.6%
interest and a consortium of IFM Investors
and AustralianSuper controlling the
remaining 50.4%.
Last month, Ausgrid smashed cross-
border records with an inaugural US$1.9bn
sale in the US private placement market to
pay off the utility’s A$2bn bridging loan.
Given its huge funding requirements,
Ausgrid’s local bond market debut could
potentially match or even surpass the
current domestic corporate record issue of
A$1bn that BHP Billiton (twice) and Telstra
share.
› ENBD EXTENDS KANGAROO CURVE
EMIRATES NBD , rated A3/A+ (Moody’s/
Fitch), extended its Kangaroo curve with
Thursday’s A$200m sale of 10-year bonds.
The United Arab Emirates lender priced
the 4.85% October 12 2027s at 99.589 to
yield 4.9025%, inside 207bp area guidance
at asset swaps plus 200bp.
ANZ was sole lead manager for the bank’s
third Kangaroo bonds, following a A$400m
5.75% five-year debut on April 30 2014
and a A$450m 4.75% seven-year print on
February 11 2015.
ENBD is the UAE’s largest banking
group in asset terms. It was formed in
October 2007 with the merger of Emirates
Bank and National Bank of Dubai, the
nation’s second and fourth largest
lenders.
Emirates Bank sold the Middle East’s first
Kangaroo bonds in November 2006 with
a A$250m dual-tranche three-year, while
NBAD issued a A$300m five-year Kangaroo
in February 2013.› SUPRAS TARGET ASIAN SWEET SPOTTwo Triple A rated supranational issuers
made good use of Asian investors’ five-year
sweet spot to raise a combined A$750m
from their Kangaroo reopenings last week.
On Tuesday, INTERNATIONAL FINANCE CORP
tapped its 2.8% August 15 2022s for
A$350m, raising the issue size to A$1.5bn.
The tap, via joint leads Deutsche Bank , RBC
Capital Markets and Standard Chartered Bank ,
priced at 100.440 for a yield of 2.7025%,
29bp wide of asset swaps and 36.75bp over
the July 2022 ACGB.
Two days later, EUROPEAN INVESTMENT BANK
added A$400m to its 5.0% August 22 2022
line, lifting the issue size to A$2.1bn.
ANZ, RBC Capital Markets and TD Securities
were joint lead managers for the tap, priced
at 110.104 for a yield of 2.765%, 35bp and
39.5bp wide of asset swaps and the July
2022 ACGB.
Also on Thursday, Norwegian
local government funding agency
KOMMUNALBANKEN (KBN), added A$75m to its5.25% July 15 2024 bonds, lifting the size of
the line to A$850m.
Deutsche Bank was sole lead on the
reopening, priced at 113.039 for a yield
of 3.0975%, 52bp wide of asset swaps and
50.75bp over the April 2024 ACGB.
At the long end, LANDESKREDITBANK BADEN-
WUERTTEMBERG-FOERDERBANK , or L-Bank, raised
A$100m from Wednesday’s 10.5-year
Kangaroo offering via joint lead managers
CBA , Deutsche Bank , RBC Capital Markets and
Nomura.
The new 3.45% April 11 2028s priced at
99.651 to yield 3.49%, 62bp and 66.75bp
wide of asset swaps and the May 2028 ACGB.› MANITOBA TAPS 2027S FOR A$50MCanada’s PROVINCE OF MANITOBA , rated Aa2/
A+ (Moody’s/S&P), tapped its 3.6% August
17 2027 Kangaroo bonds for A$50m last
Tuesday, increasing the issue size to
A$225m.
ANZ was sole lead manager for the tap,
priced at 100.867 for a yield of 3.495%,
in line with asset swaps plus 70bp area
guidance and 78bp wide of the April 2027
ACGB.Beach raising buy financing
Loans Three underwrite facility to acquire assets from OriginThree banks are underwriting a multi-tranche
loan of up to A$1.575bn (US$1.24bn) for
Australian oil-and-gas company BEACH ENERGY
to acquire assets from Origin Energy.
ANZ , Commonwealth Bank of Australia and
Credit Suisse are equally underwriting the
senior secured bullet financing, split into two
term loans of three and five years, a revolving
credit of five years and a three-year letter of
credit and bank guarantee facility.
Each of the term loans and the revolver is
for up to A$500m, while the bank guarantee
facility is for up to A$75m.
The leads are expected to approach banks
in Asia when general syndication is launched
within a month.
Beach Energy, Australia’s largest onshore
oil producer with a major gas business,
said on Thursday it would buy the assets,
dubbed Lattice Energy, from Origin Energy
for A$1.585bn in cash in a transformational
deal that will more than double its output.
The company increased its fiscal 2018 output
guidance by about 150% to 25m–27m barrels
of oil equivalent, Reuters reported.
Beach Energy is also raising A$301m
through a 3-for-14 accelerated non-
renounceable entitlement offer toshareholders. Largest shareholder Seven
Group Holdings is supportive of the
acquisition and will take A$68m of the
entitlement offer, involving the issue of
402m new Beach Energy shares at A$0.75
apiece.
The institutional tranche of the offer, which
opened on Thursday, closes on Friday, while
the retail component opens on October 5 and
closes on October 16.
Origin said proceeds from the sale would
be used to reduce its adjusted net debt to
below A$7bn as of June 30 2018.
Beach Energy last tapped the loan markets
in December 2015 for a A$530m senior
secured facility, split into a A$200m five-
year revolving cash advance facility tranche
A, a A$200m three-year revolving cash
advance facility tranche B, a A$100m three-
year revolving credit tranche C for capital
expenditure and two A$15m letters of credit.
ANZ and CBA were the mandated lead
arrangers and bookrunners of the loan. The
interest margin, calculated on a leverage
grid, opened at 150bp and 180bp over BBSY
for the three-year and five-year tranches,
respectively.
PRAKASH CHAKRAVARTI