Earlier this week, CBA issued a record A$5 billion senior unsecured transaction, the largest ever domestic credit issue. Yields were attractive to institutional investors who placed orders of A$6.67 billion, well exceeding the amount issued.
The attractive 4.75% fixed coupon for the highly rated AA- institution is a good indication of the value available in investment-grade, Australian corporate bonds at the moment.
[See our list of small parcel bond brokers if you are interested in investing in direct corporate bonds]
The previous record was set by NAB and ANZ who each raised A$4.75 billion late last year.
The four-tranche issue comprised fixed and floating three and five year issues.
CBA A$5 Billion Issue
Value ($m) |
Coupon/Margin |
Issue Yield (%) |
|
3 Year |
|||
| Fixed | 450 | 4.75 | 4.756 |
| Floating | 1,800 | 90bp over 3 month BBSW | |
5 Year |
|||
| Fixed | 750 | 4.75 | 5 |
| Floating | 2,000 | 115bp over 3 month BBSW |
Source: Kanga News
CBA also raised US$1.5 billion in the first week of January consisting of US$1.2 billion in fixed rate notes which priced at 68 basis points over US Treasuries and US$300 million in floating rate notes at the Secured Overnight Financing Rate (SOFR, a benchmark interest rate for dollar-denominated loans, replacing LIBOR) + 63 basis points.
