Commonwealth Bank launches Asian-targeted bond issue
30 May 2002
Commonwealth Bank of Australia today announced the launch of a US$500 million floating rate note under its Euro Medium Term Note Programme via Goldman Sachs (Asia) LLC and Nomura International PLC. The 5-year deal is the Bank's inaugural public market FRN and follows an Asian targeted debt investor roadshow to Beijing, Shanghai, Hong Kong and Singapore.
The Bank's Group Executive, Financial and Risk Management, Stuart Grimshaw stated that "the countries visited during the roadshow are of growing importance to the Commonwealth Bank Group and its regional position. China in particular offers potential opportunities for the Group."
"The Commonwealth Bank clearly recognizes the strategic value of raising its profile with local investors and government officials in order to take full advantage of the opportunities presented in the region."
According to John te Wechel, General Manager, Group Funding, "This transaction is deliberately aimed at further enfranchising the Bank's Asian investor base while simultaneously leveraging from the very strong demand out of Europe and the UK. We saw a significant component of the issue being placed in China which will no doubt enhance the Bank's profile with local investors and assist develop further funding opportunities from the region."
Following an informal bookbuild over the preceding 24 hours, Goldman Sachs and Nomura identified broad-based demand, resulting in heavy oversubscription of the US$500 million sized deal. This allowed the Bank to achieve improved new issue terms relative to the original pricing expectations.
Joining Goldman Sachs and Nomura in the management group for the issue as co-lead manager is ICBC (Asia) and as co-managers are Bank of China (Hong Kong), Bank of China (Singapore), Bank of East Asia and Commonwealth Bank of Australia.
This transaction is the Commonwealth Bank's first public market senior debt issue since October 1999, providing a rare offering for investors. The bonds mature on 13 June 2007, were priced at 99.904% and carry a quarterly coupon of US$ LIBOR plus 10 basis points.
The Commonwealth Bank Group is one of Australia's largest financial services organisations with leading market shares in the key areas of banking, funds management and life insurance.
The Bank has long term credit ratings of AA- (Standard & Poor's), Aa3 (Moody's) and AA (Fitch), all on stable outlook.