Australia's NAB sells 350 mln pounds of sub debt

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SYDNEY, May 30 (Reuters) - National Australia Bank
(NAB.AX), the nation's top lender by assets, has raised 350
million pounds ($686 million) of 15-year subordinated debt at
175 basis points over Sterling mid-swaps, a market source said.

The offer, which is callable after 10 years, was initially
launched with a price guidance of 175 to 180 bps.

The issue was oversubscribed and investors were scaled back
at the clearing price.

The issue was sold to over 25 investors, mostly insurance
companies, fund and asset managers, with more than 80 percent
of the notes placed in the UK.

Earlier in the week, NAB was rumoured to be in talks with
Australian investors on a possible A$300 mln 10.5-year sub debt
offer at around 170 basis points over swap. The issue would
have been callable after 5.5-years. Instead, NAB opted for a
sterling sub debt issue, said the source.

The deal details are as follows:

Issuer: National Australia Bank

Facility: Fixed rate lower Tier 2 sub debt

Documentation: European

Amount issued: 350 million pounds

Maturity: June 12, 2023

Callable: June 12, 2018

Set date: June 12

Coupon: 7.125%

Yield: 7.195%

Margin: +175 bps over Sterling mid swaps

Step-up margin: of 100 bps if the notes are not called
with a floating rate switch

Issue price: 99.507

Lead(s): Barclays Capital, Goldman Sachs and Royal

Bank of Scotland

Issue ratings: AA- (S&P), Aa2 (Moody's), AA- (Fitch)

Issuer rating: AA (S&P), Aa1 (Moody's), AA (Fitch)
($1=0.51 pounds)
(Reporting by Cecile Lefort)