Client Introduction
NBN Co is Australia’s largest broadband infrastructure company and serves as the digital backbone for Australia, connecting over 12 million premises nationwide.
Problem / Opportunity
As NBN Co was approaching network completion, it sought independent advice on developing the long term sustainable capital strategy for the business. The task involved establishing a platform to raise third party capital whilst also refinancing the existing $19.5bn shareholder loan in a systematic manner.
Solution
Grant Samuel partnered with NBN Co over a two-year period, conducting a bottoms-up long term capital strategy review that guided the development of a refinancing plan endorsed by the Government. We advised on the company’s inaugural credits ratings that underpinned access to capital markets.
As a debut issuer, price discovery of the credit was a critical challenge. Grant Samuel devised a comprehensive go to market strategy that maximised competitive tension and resulted in arranging over $6bn of bank debt, one of the largest debuts for an Australian corporate. Working closely with the company, we developed a comprehensive investor positioning statement around key credit factors such as 5G competition, long term product pricing and regulatory matters.
Key outcomes and benefits
- Over $12bn of debt arranged across Australian bank, AMTN and US144A debt markets
- Obtained high grade credit ratings from Moody’s (A1) and Fitch (AA), a benchmark amongst Australian government business enterprises
- Establishment of a diverse bank group which mitigated refinancing risk
- Development of a Global Medium Term Note programme that gave NBN Co real time access to major capital markets, a relatively rare feature amongst Australian corporates
- Delivered an improved debt maturity profile and material interest expense savings of over $200m p.a.