Investor diversity was front of mind recently for National Australia Bank (NAB) with two esoteric capital transactions in as many days. The major banks face increased capital requirements and NAB says developing new avenues to achieve funding and investor diversity is crucial.
National Australia Bank (NAB) (AA-/Aa3/AA-) launched its wholesale, perpetual non-call 10-year, additional tier-one (AT1) capital transaction on 5 December. The forthcoming deal is being marketed at 375 basis points area over semi-quarterly swap, with the notes expected to be rated BBB- by S&P Global Ratings. Pricing is expected on the day of launch.
The low-rate environment is promoting unprecedented demand for higher-yielding financial-institution (FI) product, while at the same time economic and political headwinds are making execution conditions choppy. Global FIs are increasingly leaning on noncore-currency issuance to supplement their funding requirements.