SYDNEY, July 15 (Reuters) – National Australia Bank
(NAB.AX) (NAB) sold C$400 million ($388 million) in a five-year
issue in Canada’s maple bond market, it said.
The issue was increased from an initial size of C$250
million following strong demand.
Maple bonds, paper sold by foreign companies in Canada,
boomed in 2007 as investors rushed to take advantage of a
government decision to knock down limits on foreign investment
for Canadian registered retirement plans.
Australian banks were keen borrowers there but the global
credit crisis put a halt to the expansion, as investors asked
for higher returns.
Still, Australian banks have been the most prolific
borrowers in Canada this year, raising C$1.4 billion in four
Maple bond issues this year, out of a total of C$2 billion,
ThomsonReuters data shows.
This compares to only C$177 million raised in one issue
during the same period last year.
Australia’s top four banks have an estimated A$140 billion
in funding required in the 2010 fiscal year, according to a
Morgan Stanley report. Another A$162 billion will be needed in
the 2011 fiscal year, of which A$80 billion is to refinance
maturities. Australian banks typically raise most of their
term funding offshore due to the relatively small size of the
domestic market, but unattractive currency swap rates, known as
the basis swap, has been hurting them a great deal this year.
NAB’s funding requirement target is A$20 billion to A$25
billion for the 2009/10 fiscal year.
Deal details are as follows:
Facility: Fixed rate maple bonds
Amount issued: C$400 million
Maturity: July 20 2015
Set date: July 20
Spread: +168.5bp over GoC 2015
Issue price: 99.996
Joint books: BofA-ML/RBC
Issue ratings: AA (S&P), Aa1 (Moody’s)