Casting a wide net

Westpac Banking Corporation has hitched its wagon to recent growth in the corporate debt market with the issue of new multiple debt securities in multiple currencies. Westpac's issue comes as Rio Tinto joins peers BHP Billiton and Anglo American plc in a US-managed issue worth $US3.5 billion (Rio's bond conversion, April 15).

As part of its Euro Medium Term Notes and Euro Commercial Paper programmes, rated AA by Standard & Poor's and Aa1 by Moody's, Westpac has issued approximately $790 million worth of securities.

The bank issued $323 million worth of Aussie dollar-denominated securities in three tranches maturing on May 14, €95 million ($175.5 million) worth of Euro-denominated securities maturing on May 15, €70 million ($129.4 million) maturing July 16 plus issues worth $C12 million ($13.8 million) maturing July 9 and £150 million ($311 million) maturing May 11 in their respective currencies. Across the Tasman, Westpac Securities NZ has also issued commercial paper worth $US100 million ($139.4 million) maturing July 8 and ¥1.4 billion ($19.9 million) maturing July 15.

UBS is the programme's dealer and arranger, with other dealers being Banc of America Securities, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Nomura International and Westpac Investment Banking. The last issue made under the programme was in November last year, a Westpac treasury spokesman said.

Earlier this month, the Commonwealth Bank issued $500 million worth of three-year senior bonds at 130 basis points above the bank bill swap rate, also rated AA by Standard & Poor's, but Aa by Moody's (Drop debt gorgeous, April 6).

Neither Westpac's nor CBA's issues were guaranteed by the Australian or New Zealand governments, in contrast with recent bank debt issues such as that by Suncorp Metway last week (Hot cross bonds, April 9). Suncorp's issue, managed by Citigroup and JPMorgan, raised $US2.5 billion at Libor plus 125 basis points for the two-year floating component and 150 above Libor for the component that matures in three years.

In January, CBA raised $US2.5 billion in sovereign backed bonds, NAB offered another $US500 million on top of a $US2 billion offer and ANZ raised $3.3 billion in a series of three- and five-year notes.

Things appear to be slightly different at the silver doughnut, however, with Macquarie Bank buying back over $US100.8 million ($A139.3 million) of subordinated debt according to a Reuters report.

The report said that MacBank paid 60 cents on the dollar, well above the trading range of 30-40 cents prior to the buyback, but still 40 cents cheaper than issuing new equity to pay down debt. Macquarie has around $US250 million of Tier 2 sub debt bonds still on issue.

The bonds mature in 2015 but are callable on September 18, 2010. Standard & Poor's rates Macquarie's sub debt as A-, while Moody's rates it as A2. HSBC and Royal Bank of Scotland jointly arranged the buyback, said Reuters.