EFA’s Sydney-based chief financial officer, Sonia Kammel, says: “To grow our signings from around A$400 million to A$4.9 billion over a few years is something we’re really proud of. It means we are delivering support to Australian businesses and regional infrastructure projects.”

While the majority of EFA customers are SMEs, covering all sectors from fashion to shipbuilding, an expanded remit has seen the agency look over the horizon, supporting regional infrastructure needs and growth industries such as critical minerals.

The infrastructure mandate includes projects in the Indo-Pacific region that benefit Australia, with funds deployed in Vietnam and the Pacific, and prospects being assessed in Fiji, Taiwan and Indonesia. Successes under this mandate include a US$1.3 billion financing package to support Telstra’s acquisition of Digicel Pacific, EFA’s largest financing transaction to date.

In the critical minerals space, opportunities for commodities such as lithium are being scrutinised as Australia defines its role in the global transition to renewable energy and the anticipated demand for battery storage. Australia is a primary exporter of lithium, but competition is fierce. “This new industry requires government support,” Kammel says. “Borrowers may require financing for a term that is longer than the banks have the appetite to lend. Sometimes the tenor of a loan prohibits the private sector from entering a transaction.”

Borrowers in the defence sector are typically SMEs seeking working capital, often for exporting through global supply chains. EFA sees growth opportunities for the sector and its activities as major defence projects gain momentum.

The past 12 months have seen the agency diversify its term funding significantly. EFA debuted in the US dollar 144A market in October 2022, with a US$1.5 billion five-year deal – the proceeds from which support general financing requirements, including the facility provided to Telstra for the acquisition of Digicel Pacific.

Kammel anticipates the agency will return to the 144A market within the next 12 months. “We intend to be a repeat issuer under this programme to build a yield curve and create liquidity for our investors,” she tells KangaNews.

The preference is to extend the curve beyond the existing 2027 maturity. “As an inaugural issuer, the deepest investor appetite was for five years,” Kammel explains. “We may replicate this but we will be guided by investor appetite and what our needs are.”

Investors were attracted by access to triple-A rated Australian government guaranteed credit in a currency outside of Australian dollars, she adds.

The agency is also seeking to return to the domestic market before the end of the year, likely in fixed and floating formats. This will add to its Australian dollar curve, which includes a A$250 million (US$168.2 million) 2031 maturity bond, which priced in August 2021 and which will be used partly to fund a A$1.3 billion loan to Iluka Resources.

EFA’s short-term funding needs, meanwhile, continue to be supported by the ECP market, which the borrower says provides access to a deeper pool of investors.

EFA is guaranteed by the Australian government and underscored by a sovereign-equivalent triple-A rating. The agency runs two books: the Commercial Account, where credit risk sits with EFA, and the National Interest Account, where credit risk is borne by the Australian government.

Government approval is required for loans booked to the National Interest Account. If financial risk is assessed to be too great for the Commercial Account but the transaction is judged to be in Australia’s national interest, the independent board may refer a project to the minister for trade and tourism for consideration on the National Interest Account.

EFA’s operational focus continues to be the “market gap” Kammel explains. “If the private sector can facilitate the financing of a transaction, we don’t need to step in,” she says. “If the private sector crowds-in a deal EFA is part of, and we’re not needed, we will leave the transaction.”

Financing the market gap between what is commercial and what the banks will fund is why Kammel says EFA exists. “It is about supporting exporters and helping them through periods like COVID-19, where they need help pivoting to new markets.”