Offshore markets open for three corporates
Last week was a good one for three Australian corporates, with three names securing debt in euros and US dollars.Santos provided the highlight of the week, with the sale of €650 million of hybrid securities. One hundred and sixty investors, a decent spread, signed up for a 60-year term and a security treated just one level better than ordinary equity.The bonds can be redeemed by Santos after seven years. The hybrid carries a fixed coupon of 8.25 per cent for the first seven years, and thereafter offers a floating rate including a one per cent step-up. The euro coupon of 8.25 per cent is steep by local standards. The spread is 630 points to a benchmark Deutschebank bond.The hybrid terms do not include any right to convert into Santos ordinary shares.Reuters reported that the order book exceeded the placement by more than two to one. UK accounts bought a third and the rest of Europe close to half.Fund managers bought 52 per cent of the issue; insurance companies, 12 per cent; private banks, 11 per cent; banks, seven per cent; and hedge funds, seven per cent.Woolworths sold US$1.25 billion of senior notes via two separate fixed rate issues early last week.Asciano repaid bank debt with the sale of US$400 million of senior guaranteed notes with a five-year term.In the international arena, Rabobank made history of sorts by being the first bank ever to issue bonds with a maturity of 100 years. Rabobank raised US$350 million at 5.8 per cent selling bonds to 12 investors from Asia, the US and Europe.