CBA issues $5 billion in three and five year bonds

Immediately after its annual results, CBA came to the market to raise $5 billion in senior unsecured bonds. The issue had four tranches:

1. Floating rate, three years issued at 3m BBSW + 75 basis points (bp) – raised $1.1 billion
2. Fixed rate, three years with an 4.82% issue yield – raised $500m
3. Floating rate, five years issued at 3m BBSW + 95bp – raised $2.4 billion
4. Fixed rate, five years with an 5% issue yield – raised $1 billion

Yield guidance had been 77bp for the three year and 100 bp for the five year debt.

According to KangaNews, bids for the new issue were $7.8 billion (US$5.1 billion) and while the bank considered increasing the size of the raise, it ultimately decided against it.

Also read: Has the BBSW Peaked?

The deal follows Westpac’s $2.25 billion, three year raise a week earlier, indicating a receptive market. The yield was also 3 month BBSW +75bp.

CBA raised A$37 billion in the FY23 and is expected to raise a similar amount this financial year with repayment due of its term funding facility.