NBN Co Raises $1.2b In Issuing Five-Year Bonds

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NBN Co Raises $1.2b In Issuing Five-Year Bonds

NBN Co, owner and builder of the National Broadband Network, has announced what it says is a record-breaking issuance by an Australian company of $1.2 billion worth of five-year bonds with a low coupon rate of one per cent. 

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

According to the company, a heavily oversubscribed order book drove considerable price tightening, resulting in the final offer price reducing by 15 basis points below the guidance initially provided. 

“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. 

Joint lead managers were the big four Australian banks, ANZ, Westpac, NAB and Commonwealth Bank. 

“The transaction provides NBN Co with a strong platform for future bond issuances in Australia and offshore markets,” NBN Co said in its statement.

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In May this year, NBN Co raised $6.1 billion in debt facilities in private capital markets, which was three times the amount it had indicated it would borrow in its 2020-23 corporate plan. $2 billion was to fund the final rollout of the network, with the balance to be used for debt refinancing or future investment. NBN Co has a $19.5 billion debt from the federal government which matures in June 2024. It is expected at that point that the debt will be refinanced on private markets.

In September 2020, NBN Co announced $4.5 billion in network investment upgrades which will see around 8 million premises having access to ultra-fast broadband of up to 1 Gigabit per second and the creation of 240 Business Fibre Zones nationwide by 2023.

NBN Co reported in November that it had 7.66 million premises connected to the network, with 388,000 premises added in the three months to 30 September 2020. 

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