Rabobank Sells Australia’s First Foreign Bank Bonds for 2014

Rabobank Groep sold A$600 million ($528 million) of five-year floating-rate notes in Australia, the first bond issue from a foreign commercial bank this year.

The Dutch lender’s Australian branch sold the securities at 105 basis points more than the bank-bill swap rate, according to an e-mailed statement from Australia & New Zealand Banking Group Ltd. (ANZ), which managed the transaction along with Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC)

Rabobank last sold bonds in Australia in September, when it priced A$500 million of five-year floaters at a margin of 113 basis points above the swap rate, Bloomberg-compiled data show. The Utrecht, Netherlands-based lender carries the same credit ratings as Australia’s four largest local banks, with scores of Aa2 at Moody’s Investors Service and AA- at Standard & Poor’s.

Overseas banks including Goldman Sachs Group Inc., Bank of China Ltd. and BNP Paribas SA sold A$16.5 billion of bonds in Australia last year either directly or through local subsidiaries, according to data compiled by Bloomberg.

Australian bond sales so far in 2014 total A$4.28 billion and have been dominated by top-rated sovereign-backed and supranational issuers which tap the market frequently, Bloomberg-compiled data show. Bendigo & Adelaide Bank Ltd. is the only local bank to have issued so far, raising A$300 million in a subordinated debt transaction.

The average spread on bank bonds in Australia was 99 basis points more than swaps yesterday, near a more than five-year low of 96 basis points reached in November, according to Bank of America Merrill Lynch indexes. National Australia Bank Ltd. was the last of the country’s so-called four-pillar banks to sell five-year debt domestically, pricing A$1.5 billion of floating-rate notes on Nov. 1 at an 88 basis-point spread.

To contact the reporter on this story: Benjamin Purvis in Sydney at bpurvis@bloomberg.net

To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.