31 March 2011
National Australia Bank (NAB) is pleased to announce the results of the inaugural “NAB US Private Placement (USPP) Survey.” NAB is the first bank to conduct and release a survey of this detail.
The survey found that 48% of investors prefer a 7-10 year tenor, while 30% of respondents prefer a 10-12 year tenor. While the market has always been regarded as a source for long-term capital, the survey disclosed that a meaningful amount of investors prefer to lend out past 12 years.
In regards to the average bid size, 43% of respondents ordered $20-$40 million and 29% between $10-$20 million followed by 14% who ordered $40-$70 million.
Geoff Schmidt, NAB’s Global Co-Head of Debt Capital Markets said the survey gives NAB even more information to deliver successful outcomes for the bank’s USPP issuers.
“As prospective issuers become increasingly comfortable entering the market the survey results will allow us to provide greater insight and detail on what USPP investors are looking for.
“The results will help us to better serve our issuer clients on future transactions as we will be able to track previously undisclosed changes in the marketplace, for instance changes in the new issue premium levels over time. This is one of many examples of how NAB is prepared to go the extra mile for its clients,” Mr Schmidt said.
From the perspective of investors 66% of respondents view Australian investments favourably and 24% more favourably than last year. “This is a trend that is likely to continue, Australian investments have performed very well over the years,” Mr Schmidt said.
The confidential survey was distributed to 50 of the USPP market’s most prominent investors and received an overwhelming response rate almost 60 per cent. The majority of investors surveyed were US life insurers who typically invest between US$300million and US$10billion in the USPP market each year.
Respondents answered an array of questions spanning topics such as country, sector and credit quality preferences, as well as penetrating market composite deal data, and 2011 investment budgets.
James Waddell, Director Capital Markets Origination, NAB said: “The results of this survey are important for Australasian borrowers because the USPP market is a significant source of long-term debt capital for Australasian corporate borrowers.”
Since 2002, ninety-five Australasian borrowers have tapped this market in over one hundred and sixty-four transactions raising over US$42 billion for terms between four and 30 years.
NAB plans to distribute the survey to investors on a quarterly basis and use the results to map trends in the market and better facilitate the flow of information between investors and issuers.
Media Contact: Elisha Vincent M: +61 (0) 429 566 676