Bond aims to make corporate debt raising easier.
National Australia Bank (NAB) helped launch the first Simple Corporate Bond with Australian Unity Limited. The Bond seeks to raise around $200 million and aims to cut red tape associated with corporate debt raisings.
A simple corporate bond must satisfy these conditions:
- The securities must be quoted on a prescribed financial market, such as the Australian Stock Exchange (ASX).
- The securities must be denominated in Australian currency.
- The fixed term of the securities cannot exceed 15 years.
- The securities must be “debentures” as defined in the Corporations Act 2001.
Australian Unity announced the new ASX-listed unsubordinated and unsecured bonds. This is the first bond of its kind since the introduction of new Federal Parliament legislation enabling them last year.
The deal between Australian Unity and NAB is a significant milestone in the development of Australia’s corporate bond market.
NAB executive general manager for capital financing Steve Lambert said the simple corporate bond regime has allowed Australian Unity to gain access to alternative fixed income products.
This offer assists Australian Unity in accessing the vast pool of domestic retail investors who have traditionally been unable to gain access to alternative fixed income products. The simple corporate bond regime has changed all that,” Lambert said
The domestic retail market provides Australian Unity with a differentiated investor base focused on cash flow generation capabilities. The bond market is supportive of growing companies like Australian Unity, Lambert added.
NAB is the joint arranger and bookrunner for this deal. This will allow Australian Unity to maintain a foothold with retail investors in the ASX-listed market.
Australian Unity Group Managing Director Rohan Mead said the simple corporate bond structure suits the company’s objective of expanding operations.
This facility enables both institutional and retail investors, including the company’s members, to participate in these Bonds and to contribute to the expansion of our activities to support the Australian Unity Group’s growth strategy,” Mead said.
Australian Unity is a national healthcare, financial services and retirement living organisation. It provides services to around 850,000 customers. Australian Unity is a 175-year-old mutual organisation.