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.
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.
With a sizeable financing task at their hands, while the Company was still in growth mode, NBN Co wanted genuine independent advice that was clear of any conflicts and served the best interests of the Company and the Australian Government.
The task required strong commercial acumen and innovation to educate investors on NBN Co’s credit while also arranging sizeable funding that has made NBN Co one of the Top 10 borrowers amongst Australian corporates.