Suncorp-Metway Plans Inaugural Offering of Covered Bonds

Suncorp-Metway Ltd., Australia’s sixth-largest mortgage lender, is planning to sell notes due in four years to five years in its debut offering of covered bonds.

The lender will start marketing the Australian dollar-denominated securities soon, depending on market conditions, according to an e-mailed statement today from RBC Capital Markets, which is helping to arrange the sale. Barclays Plc, Deutsche Bank AG and UBS AG are also managing the offering, according to the statement.

Suncorp-Metway may price the securities to yield about 140 basis points more than swap rates, two people with direct knowledge of the matter said today, asking not to be identified because the details are private.

It would be the first covered bond sale by an Australian lender outside the nation’s four biggest, according to data compiled by Bloomberg.

Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. in the first quarter issued the equivalent of $25 billion of covered bonds, which are mortgage-backed notes that stay on the seller’s balance sheet. The Australian government passed laws in October allowing the nation’s banks to issue of the securities.

Fitch Ratings expects to rate Suncorp-Metway’s notes AAA, according to an e-mailed statement on May 21.

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