Member access

4-Traders Homepage  >  Shares  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  National Australia Bank Ltd.    NAB   AU000000NAB4

End-of-day quote. End-of-day quote AUSTRALIAN SECURITIES EXCHANGE LIMITED - 02/27
37.9 AUD   +0.74%
02/25 NATIONAL AUSTRA : Let’s celebrate small business nationally
02/23DJNAB Acts After Compensating Customers for Poor Financial Advice
02/18 NATIONAL AUSTRA : NAB-Rural Commodities Index up sharply
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

National Australia Bank Ltd. : NAB Sells $1.25 Billion Of Covered Bonds At Record-Low Coupon

06/12/2012 | 06:37pm US/Eastern
   By Patrick McGee 
 

National Australia Bank Ltd. (NAB.AU) garnered the lowest yield on record for an Australian bank selling covered bonds priced in U.S. dollars on Tuesday.

The deal marks the fourth greenback-covered bond sale from an Australian bank, and the first from NAB, since legislation allowing the assets to be sold was passed last fall.

NAB, the country's fourth-largest lender by market value, sold $1.25 billion of five-year bonds with a 2% coupon, compared with a range of 2.25% to 2.45% from the prior three deals, all of which were for five-year bonds.

NAB's bonds were priced to yield 2.032%, or 1.295 percentage point over the Treasury rate. When it sold $1.25 billion of five-year unsecured bonds in March, they carried a coupon of 2.75% and were priced to yield 2.79%, or 1.90 point over Treasurys.

The much tighter spread stems from the extra protection embedded in the covered bond, which offers investors the full faith and credit of the issuer and also the added protection of a pool of mortgage assets. If NAB ever defaulted on its bonds, the stream of payments from the mortgage pool would "cover" the bondholders.

These bonds are backed 100% by Australian prime residential mortgages, earning them triple-A ratings from Moody's Investors Service and Fitch Ratings. NAB's unsecured bonds are rated Aa2 by Moody's, and AA-minus by Fitch and Standard & Poor's.

NAB Chief Executive Cameron Clyne told reporters last month that NAB was planning to issue more covered bonds because the recent flare-up in Europe was hurting international debt markets.

"None of these issued in Europe are helpful to our funding profile," he told reporters May 10, following the bank's earnings report. "If we do see an elevated period of concern...we can start to use some more of our covered bond capacity."

Since December, NAB has sold covered bonds on 12 occasions, including in euros, British pounds, Norwegian kroner and New Zealand dollars, according to data from Dealogic. The lowest fixed-rate coupon among them was a 2.375% bonds priced in New Zealand dollars.

Tuesday's deal pushes year-to-date issuance in the U.S. dollar covered bond market to $26.15 billion, according to Dealogic. Last year's record issuance was just less than $40 billion.

The last covered bond to price in the U.S. was a $2 billion, 2.25% coupon, five-year deal from Barclays. It priced at 2.352%, or 1.53 points over Treasurys.

Write to Patrick McGee at patrick.mcgee@dowjones.com

React to this article
Latest news on NATIONAL AUSTRALIA BANK LT
02/26 NATIONAL AUSTRALIA BANK : New Zealand investors should prepare for a hybrid delu..
02/25 NATIONAL AUSTRALIA BANK : Let’s celebrate small business nationally
02/25 NATIONAL AUSTRALIA BANK : ASIC chairman Greg Medcraft announces expanded probe i..
02/23DJNAB Acts After Compensating Customers for Poor Financial Advice
02/18 NATIONAL AUSTRALIA BANK : Avoid NAB Capital Notes
02/18 NATIONAL AUSTRALIA BANK : NAB-Rural Commodities Index up sharply
02/18 NATIONAL AUSTRALIA BANK : Celebrate Lunar New Year with special promotions from ..
02/17 NATIONAL AUSTRALIA BANK : launches $750m hybrid issue
02/16 Duke coy on Pumpkin Patch but branches out in retail market
02/10 NATIONAL AUSTRALIA BANK : Innovator's Playbook
Advertisement
Chart
Duration : Period :
National Australia Bank Lt Technical Analysis Chart | NAB | AU000000NAB4 | 4-Traders
Income Statement Evolution
More Financials
Dynamic quotes  
ON
| OFF