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SYDNEY, Jan 30 (Reuters) - St George Bank Ltd SGB.AX,
Australia's fifth-largest lender, placed A$900 million ($804
million) of floating rate notes with more than 25 investors.
Over 90 percent was sold to Australia-based fund managers,
banks and middle market buyers. The balance was sold offshore,
predominantly in Asia. European investors bought a small
portion of the issue.
St George Bank on Wednesday upsized the FRN issue to A$900
million and offered the same terms as the original A$800
million FRN which was launched and priced on Tuesday.
The final size is three times the amount St George planned
to raise on Tuesday when it launched an issue of at least A$300
million.
The FRN paid a margin roughly in line with St George's
secondary levels of similar maturity, according to nabCapital.
"To gain that sort of volume at that level is certainly
positive but I would not necessarily take it as the turning
point of the market," said Michael Bush, head of fixed income
credit research at nabCapital.
Australia's bond market has seen a rush of new issuance so
far this year, yet the identity of the borrowers speaks volumes
about the market's fragile state of mind.
Over half of the A$6.8 billion in bond sold since Jan. 1
were sold by Australian banks who were shopping at home because
borrowing abroad has become painfully expensive since the U.S.
subprime mortgage crisis triggered a global credit crunch last
August.
The remaining bond issuance has come from the safest triple
-A rated borrowers, mostly backed by governments, since
investors are reluctant to lend to anyone else.
The deal details are as follows:
Issuer: St George Bank Ltd
Facility: Domestic floating rate transferable
deposit increase
Amount issued: A$100 million
Total on issue: A$900 million
Maturity: Aug. 6, 2009
Set date: Aug. 6
Coupon: +39 basis points over 90-day BBSW
Yield: +39 basis points over 90-day BBSW
Margin: +39 basis points over 90-day BBSW
Issue price: 100
Lead: St George Bank
Co-leads: RBC Capital Markets, UBS
Issuer rating: A+ (S&P), Aa2 (Moody's), A+ (Fitch)
($1=A$1.12)
(Reporting by Cecile Lefort)
