The owner and builder of the National Broadband Network, NBN Co, has raised US$2 billion in a bond deal in the United States and there are more deals in the pipeline for other markets in 2021.
The NBN bond issue was split between a five-year bond worth US$750 million and a 10-year bond worth US$1.25 billion.
The 10-year bonds were priced at at 107 basis points above US Treasuries and will pay 2.625 per cent coupon while the five-years issue was priced at 67 basis points and will pay 1.45 per cent.
“The proceeds will be used for general corporate purposes including the refinancing of NBN Co’s Commonwealth loan and to fund future capex plans,” NBN Co said.
Joint lead managers on the deal are Goldman Sachs, JPMorgan, Bank of America, and Morgan Stanley.
It’s understood NBN Co will head to European capital markets later this year.
In December last year, NBN Co announced what it said was a record-breaking issuance by an Australian company of $1.2 billion worth of five-year bonds.
In May 2020, NBN Co raised $6.1 billion in debt facilities in private capital markets, which was three times the amount it had indicated it would borrow in its 2020-23 corporate plan.
$2 billion was to fund the final rollout of the network, with the balance to be used for debt refinancing or future investment. NBN Co has a $19.5 billion debt from the federal government which matures in June 2024. It is expected at that point that the debt will be refinanced on private markets.
In September 2020, NBN Co announced $4.5 billion in network investment upgrades which will see around 8 million premises having access to ultra-fast broadband of up to 1 Gigabit per second and the creation of 240 Business Fibre Zones nationwide by 2023.
NBN Co reported in November that it had 7.66 million premises connected to the network, with 388,000 premises added in the three months to 30 September 2020.
