NSW Ports has raised the longest dated bond ever for an Australian issuer on the US Private Placement market, according to sources familiar with the transaction.
Late last week the port owner launched a USD 200m issue but came away with USD 365m after it received about USD 2bn of interest from investors.
The money was raised in four tranches – two in US dollars for 12 and 15-year tenors and two in Australian dollars for 15 and 30 years.
The 30-year tranche was for AUD 150m. This was priced at 140 basis points over 30-year US Treasuries. The 15-year tranche was a bullet bond, meaning the repayment is due at the end of the loan period, for AUD 70m at 140bps over 10-year US Treasuries.
The US dollar parts of the bond were a 12-year bullet of USD 115m at a spread of 120bps over 10-year Treasuries and a USD 80m portion for 15 years at 135bps over 10-year Treasuries.
The 10-year and 30-year treasuries were at 2.81% and 3.08% respectively at the time of the pricing last week.
That gives a coupon for the Australian dollar 30-year tranche at 4.48%, the 15-year Australian dollar portion at 4.21%, the US dollar 12-year tenor tranche at 4.01%, and the USD 15 year tranche at 4.16%.
The Australian dollar parts will settle in April and the US dollars in July.
NSW Ports is owned by a consortium of infrastructure investors including IFM and Abu Dhabi Investment Authority. They have a 99-year lease over Port Botany and Port Kembla after the NSW government privatised them in 2013.
The long tenor of the Australian dollar placement was partly put down to investors’ familiarity with the port operator – it has been to the USPP market three times since the privatisation.
The insurance companies investing in the USPP are also keen on infrastructure assets in Australia, which has a growing economy and population and expects to see more goods traded through its ports.
Investors have become familiar with several infrastructure companies from Australia in the past couple of years including Ausgrid, Endeavour Energy and TransGrid, which have all refinanced large amounts of acquisition debt, as reported.
Bank of America Merrill Lynch, NAB and Westpac were joint lead managers on the issue.
The deal was done after a three-day roadshow in the US in late February, as reported.