NAB FRN leads debt capital market action

The highlight in the debt capital market last week was National Australia Bank's A$1.9 billion, five-year floating rate note issue. It was the largest single tranche issue since ANZ raised $2.5 billion for five years in early April.



Pricing has come in two basis points since ANZ priced its FRNs at 82 bps over bank bills.



Some might argue, instead, that ANZ's $600 million Green Bond issue was the highlight of the week, as it is only the third such issue to be seen. But with the five-year bonds being priced at 80 bps over swap, the expensive certification required provides no pricing advantage.



However, the additional cost incurred may attract some investor diversification.



Corporacion Andina de Fomento (rated AA-), the Latin American development bank, returned to the market with its third issue and the first since October 2013. At $150 million and with a term to maturity of ten years, the issue is also the smallest and longest dated.



The bonds were priced at 165.25 bps over commonwealth government securities to yield 4.5 per cent.



Westpac raised $150 million for one year, in two equal sized tranches priced at 34 bps over bank bills.



And on Friday, Bank Nederlandse Gemeenten (rated AA+) added another $50 million to its July 2025 line, to take the size of the line to $675 million. The increase was priced to yield 3.42 per cent.



Across the Tasman, Kiwibank (rated A+) raised NZ$200 million for five years. The bonds were priced to yield 4.6475 per cent.

And offshore, BNZ (rated AA-) sold CHF175 million of seven year bonds, priced at 25 bps over mid-swaps.