With such a significant amount to refinance, capital markets were one clear route. But the company faced some significant challenges. Post-acquisition, Ausgrid was a new entity that needed to be explained to investors, who’d need to do significant work to understand and price the credit appropriately. Bradburn had the opportunity to go to any market using any sequencing the company decided to do – but getting the first foray right was crucial.
“Having supported IFM and AustralianSuper with the acquisition facilities for Ausgrid, and recognising the refinance task ahead, we immediately turned our focus to assisting them with the refinance. As one of the leading financiers in the sector with strong global capital markets capabilities, we were able to help the company formulate its refinancing plan and create a robust execution strategy,” says Vijendra Singam, Director of Energy and Utilities.
Ausgrid already had the US public market in mind, “but when I arrived I’d had previous experience in the US private placement market and felt the investors there would really do the upfront work to understand us and price us well,” Bradburn says. The company decided to also hit the Australian domestic market for a smaller proportion of the deal at the same time, catering to local appetite for the new utility.
CRACKING THE USPP MARKET
Within six weeks of arriving at Ausgrid, Bradburn was on a plane to the US. The timing was tight.
“Ausgrid was an entirely new entity, it had no documentation or any debt capital marketing we could use – everything had to be done from scratch,” says NAB’s Director of Corporate Debt Markets Origination Clare Lewis. But the timing was also perfect: “Conditions were very strong, demand for the Ausgrid name was strong and we knew we’d get the volume and pricing Ausgrid really wanted.”
“NAB moved mountains to get it done in time,” Bradburn adds. “All the legal documents had to be prepared and we needed the documents to reflect the nuances of our business transformation. More than any other bank, they carried the load.”