SYDNEY, June 6 (Reuters Basis Point) - National Australia Bank, Australia’s largest business bank, is looking to tie up with Wells Fargo & Co to bring Australian borrowers to the U.S. term loan B and high-yield bond markets, banking sources familiar with the initiative said on Thursday.
An alliance with Wells Fargo would make NAB the first Australian major bank to set up a business to compete directly with the investment banks such as JP Morgan and Bank of America Merrill Lynch who dominate the lucrative term loan B market.
The U.S. term loan B market is a sub-investment grade or “junk” bond market, offering riskier borrowers long-term funding at attractive pricing compared to the Australian bank loan market.
The sources could not be named as they were not authorised to speak on the matter. A NAB spokeswoman declined to comment while Wells Fargo was not immediately available for comment.
A number of Australian companies including Fortescue Metals Group and private-equity owned Hoyts Cinemas have successfully tapped the TLB market in the last 12 months, with year-to-date issuance topping $3.74 billion according to Loan Pricing Corp data.