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NBN Co Raises $1.2bn In History-Making Issuance

NBN Co has issued a staggering $1.2 billion worth of five-year bonds at the low coupon rate of 1%, in what the company claims is the lowest in Australian corporate history.

The government-owned broadband provider said the issuance was the “largest single tranche of debt and the lowest coupon rate… ever achieved by an Australian corporate”.

The final order book comprised 55 investors, with the big four banks ANZ, Westpac, NAB and Commonwealth Bank acting as lead managers in the issuance, according to The Australian Financial Review.

“The transaction provides NBN Co with a strong platform for future bond issuances in Australia and offshore markets,” NBN Co said in a statement.

“The final order book comprised 55 high-quality investors, with strong participation from asset managers with domestic accounts dominating overall demand and representation within the order book.”

NBN had planned on borrowing $2 billion on private debt markets in 2020, however investor interest and a low borrowing rate means it was able to borrow four times this amount.

The money borrowed will go towards upgrading the slower parts of the NBN.

The transaction is due to settle on 3 December 2020 and will mature on 3 December 2025.

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