Log in
Login
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

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

End-of-day quote. End-of-day quote  - 05/03
27.63 AUD   +3.76%
05/03DJNATIONAL AUSTRA : Reserve Bank of Australia Cuts Benchmark Rate
05/03 NATIONAL AUSTRA : NAB passes on 0.25% p.a. cut to home loan customer..
05/02DJANZ 1st Half Profit Drops on Charges; Dividend Cut
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

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

share with twitter share with LinkedIn share with facebook
share via e-mail
0
06/13/2012 | 12:37am CEST
   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

share with twitter share with LinkedIn share with facebook
share via e-mail
0
React to this article
Latest news on NATIONAL AUSTRALIA BANK LT
05/03DJNATIONAL AUSTRALIA BANK : Reserve Bank of Australia Cuts Benchmark Rate
05/03 NATIONAL AUSTRALIA BANK : NAB passes on 0.25% p.a. cut to home loan customers
05/02DJANZ 1st Half Profit Drops on Charges; Dividend Cut
05/02 NATIONAL AUSTRALIA BANK : NAB joins with Deakin University to boost adviser educ..
05/01DJWestpac Profit Rises But Says Institutional Charges Jump
04/28 NATIONAL AUSTRALIA BANK : MLC bolsters MLC Advice business
04/26 NATIONAL AUSTRALIA BANK : NAB welcomes ASIC action
04/25 NATIONAL AUSTRALIA BANK : NAB Asset Servicing wins APN Property Group services
04/22 RENEWABLES INFRASTRUCTURE : Renews GBP150 Million Acquisition Facility
04/21 NATIONAL AUSTRALIA BANK : Andrew Hagger appointed Chairman of JBWere
Advertisement
News chart
Full-screen chart
Income Statement Evolution
More Financials