Rabobank Sells Australia’s First Foreign Bank Bonds for 2014Benjamin Purvis
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., which managed the transaction along with Commonwealth Bank of Australia and Westpac Banking Corp.
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.