NBN Co raises USD $1 billion via US bond issuances

NBN Co has successfully secured USD $1 billion (AUD $1.45 billion equivalent) through its most recent bond issuances in the United States debt capital markets. The funds were raised via a dual tranche offering, which included a USD $500 million (AUD $727 million equivalent) three-year tranche and a USD $500 million (AUD $727 million equivalent) five-year tranche.

The transactions, finalised on 1 October 2024, attracted significant interest from investors across both Asia and the United States. The bond issuances were met with a considerably oversubscribed order book, totalling over USD $4.3 billion as disclosed by the company. This move marks NBN Co's return to the US debt capital market, following a previous issuance in September 2023 where the company raised USD $1.25 billion (AUD $1.97 billion equivalent).

The proceeds from these latest issuances will be allocated for general corporate purposes, predominantly aimed at refinancing existing debt. Fiona Trigona, Executive General Manager and Group Treasurer at NBN Co, expressed satisfaction with the outcome, stating, "We were very pleased with the outcome of our latest US bond issuance, with interest from a number of new investors and a total final order book over USD $4.3 billion."

Trigona highlighted the diverse and high-quality nature of investor interest, noting, "The offering was heavily oversubscribed, with strong interest from both the US and Asian markets and there were many high-quality investors in the book, including central banks and sovereign wealth funds." This transaction reportedly allowed NBN Co to reprice its US Dollar interest rate curve within the US144A market, signalling the company's status as an established issuer backed by a robust credit profile and diversified investor base.

Apart from its endeavours in the US, NBN Co also managed to raise AUD $1.75 billion domestically through its Australian Medium-Term Notes (AMTN) issuance. This domestic issuance, which settled on 28 August 2024, included a seven-year benchmark Green Bond amounting to AUD $750 million, alongside a three-year Bond which secured AUD $1 billion.

NBN Co's commitment to green projects is underscored by its status as the largest Australian corporate issuer in the Green Bond format, with approximately AUD $6.7 billion equivalent outstanding in both domestic and international markets. The proceeds from all Green Bonds have been directed towards eligible green projects, in alignment with the company's Sustainability Bond Framework, which underwent an update in June 2024.

The company continues to maintain its focus on energy efficiency and sustainability, ensuring proceeds are channelled into green initiatives. This strategic approach not only supports NBN Co's corporate objectives but also underscores its commitment to responsible environmental practices.