Australia's NAB prices US$1 bln, plans more-source

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SYDNEY, Feb 4 (Reuters) - National Australia Bank (NAB.AX: Quote, Profile, Research, Stock Buzz)
(NAB), Australia's top lender by assets, has sold US$1 billion
of 2-year floating rate notes in the 144a market and plans
another short-term note issue, a market source said on Monday.

The notes maturing on Feb. 8, 2010, paid 45 basis points
over US Libor.

The notes priced at 100 and will settle on Feb. 8.

NAB is rated AA by S&P and Aa1 by Moody's.

Goldman Sachs and Morgan Stanley jointly managed the sale.

The issuer is also planning to sell extendable notes in the
U.S., with the same pair of leads, said sources.

Pricing is expected on Monday, during the New York business
hours.

Extendable notes allow borrowers to tap U.S. money funds,
which with over US$3 trillion of assets represent one of the
world's largest investor segments.

Extendables notes have become a popular source of funding
this year for Australian banks which have already raised a
total of US$11 billion in such notes since Jan. 3.

The sale of extendable notes allow borrowers to lock in
savings estimated in the multiple basis points.

Three major Australian banks have tapped the extendable
market, which comprises a limited number of investors who tend
to place large orders.

Just las week, Australia & New Zealand Banking Group
(ANZ.AX: Quote, Profile, Research, Stock Buzz) sold US$3.75 billion of such notes via JPMorgan. It
was the bank's second extendable issue this year.

The NAB planned offer will also represent the bank's second
extendable issue this year.

Extendables are a form of short-term debt sold for an
initial period, usually 13 months, and can be further rolled
over until final maturity, typically five-years. Holders have
an incentive to extend the maturity with acoupon that steps up
annually.
(Reporting by Cecile Lefort)