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July 10, 2014 -

Australian corporates raise funds from Europe

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There has been extensive media coverage of Australian corporates raising funds from Europe, with the assistance of BNP Paribas in Australia.

“The $3 billion in bond issues in Europe by retail estate investment trust Scentre Group is further proof that offshore capital markets are offering Australian companies the opportunity to lock in the cheapest long-term debt funding in more than six years,” the Australian Financial Review recently reported.

“Australian companies can now borrow 10-year money in offshore capital markets at interest rates of about 5 per cent. Negative deposit rates in Europe have made the yield offered by corporate issuers very attractive to investors.”

The Scentre transaction is one of the largest-ever European debt deals by an Australian corporate. Management had been aiming for about A$2 billion but orders approached $5 billion across four currencies.

Kate Stewart, managing director and head of debt capital markets at BNP Paribas in Sydney, said there was positive investor response to the credit and the quality of the book.

“There was a fantastic turnout at the roadshow, and a great response both to the issuer’s profile of an Australian and New Zealand asset book and its rating status.”

The media also reported: ”In the past three months, BNP Paribas’ Australian operations have been involved in the raising of more than $10 billion for Australian companies:

• $7 billion for Gina Rineharts’s Roy Hill iron ore mine in Western Australia;
• EUR1.6 billion and GBP 400 million for Scentre, and
• Euro500 million for Brambles.”