Australia/New Zealand loan house

IFR Asia Awards 2014
3 min read
Sharon Klyne

In a mature market where the four major domestic banks were dominant, National Australia Bank stood out from its peers in 2014, thanks largely to a reshuffle of its debt markets team that broadened its product offerings.

Under the leadership of Steve Lambert, executive general manager of NAB’s debt markets division, the bank rolled out a client-focused structure in 2013, bringing together loan and bond specialists in a single team. While common in global banks, the set-up is unique in Australia, and allowed NAB to originate and execute across all debt products in 2014.

“This is a product-agnostic structure, not a ‘product-siloed’ team, which has an advantage from an execution standpoint,” said Stephen Boyd, head of corporate debt markets origination.

NAB led several significant deals during IFR’s review period, including a A$400m (US$340m) syndicated bank guarantee for supermarket chain Woolworths that showcased its newly combined platform.

As one of two bookrunners, NAB helped devise a unique structure that allowed the company to use its funding lines more efficiently in issuing WorkCover bank guarantees that transferred the risk from banks to insurance firms. WorkCover is a statutory insurance scheme for workers’ compensation in Australia.

The bookrunners tapped offshore insurance firms to create a new universe of investors for Woolworths, which, in turn, freed up credit lines for its banks. The order book was 3.75 times oversubscribed.

The structure was a first for an Australian borrower and could be copied by other borrowers that need guarantees to meet liabilities to third parties.

Another notable success came with the jointly underwritten A$2.9bn loan backing a Transurban-led consortium’s winning bid to acquire a portfolio of toll roads from Queensland Motorways. The deal was oversubscribed and nine lenders joined in general syndication. The financing package also included a A$1bn two-year bridge loan that the four underwriters – ANZ, CBA, NAB and Westpac Banking Corp – held jointly.

Across the Tasman Sea, NAB’s Bank of New Zealand also has a strong franchise and underwrote several transactions on a sole basis, including a NZ$500m (US$392m) standby facility for Auckland Council. It was the first New Zealand facility with a term-out option, with a one-year maturity and an option to extend the loan for another year.

The bank also underwrote a NZ$165m revolving credit for mobile operator Two Degrees, New Zealand’s third-largest mobile operator. Despite the aversion of the major banks to mobile operators, a legacy from the collapse of OneTel in Australia, the deal was oversubscribed with a number of Asian lenders participating.

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